Medical identification theft is a significant problem for hundreds of thousands of Americans, yet it has received little attention from the media and policymakers in recent years.
In 2017 alone, three instances of patient record theft — at Med Center Health in Kentucky, Airway Oxygen in Michigan, and the Women’s Health Care Group of Pennsylvania — exposed nearly 1.5 million patients to the theft of their medical identity. This can be incredibly dangerous, resulting in patients receiving the wrong treatment and unnecessary billing, or even physical harm. Like other forms of identity theft, medical ID theft can leave consumers on the hook for thousands of dollars of fraudulent bills.
One idea from Congress — to add “smart chips” to Medicare cards — has the promise of curbing this threat for a significant segment of the population.
In recent years, the private sector has taken steps to improve data security by making debit and credit cards more secure by adding “smart” chips and other cybersecurity measures. The federal government, however, continues to rely on often-insecure identification, which exposes consumers to fraud and medical identity theft.
Nearly 56 million seniors and Americans with disabilities depend on Medicare for their primary health care coverage. Every single one of them carries a paper card with a Medicare number on it, a shockingly insecure means of identification for a program that guarantees health care for a population that is particularly vulnerable to fraud.
According to a recent Government Accountability Office report, “In fiscal year 2017, improper payments to Medicare providers, suppliers and plans resulted in nearly $45 billion in overpayments.” This kind of fraud can directly and negatively affect patients, who do not receive necessary care due to fraudulent billing, or whose annual Medicare allotments can be used up paying for phantom pills and doctors visits, leading to delays in life-saving treatment. About 18 million Medicare beneficiaries live on less than $18,000 a year, and fraud and identity theft have an outsized impact on these low-income Americans.
Fortunately, Congress recently took action to address this deficiency in information security for the Medicare program. In September, with bipartisan support, the House passed the “Fighting Fraud to Protect Care for Seniors Act of 2018.” This bill would put into place a pilot program to add the smart chip technology to Medicare cards in three designated geographic areas, and test the effectiveness of these new secure, machine-readable, tamper-resistant cards for at least three years.
These new cards would be issued at no cost to program beneficiaries. Similar programs in France have not only improved cybersecurity but has reduced the administrative burden for providers, allowing them to dedicate more time to patient care.
Seniors advocacy groups, including the American Association for Retired Persons, have strongly endorsed this legislation. In a letter to Congress, AARP noted that smart cards “could provide even greater security, and have the potential to contain useful health information and facilitate care. … Combating fraud and abuse is about more than just saving money, it is about protecting beneficiaries and improving care.” French policymakers engaged with stakeholders, including consumer groups and pensioner advocates, in designing their smart health care card program, and U.S. officials should do the same.
Consumer Action works with thousands of community-based organizations, across numerous languages, to reach consumers where they are and provide technical assistance and financial literacy training and educational services to at-risk populations. This includes counseling regarding medical ID theft and account fraud, which can have a devastating impact among low-income and non-English speaking communities. Any action that can be taken by the federal government to reduce fraud and abuse among the Medicare population, without reducing access to this program’s essential services, should be a Congressional priority.
The House has taken an important step toward securing the Medicare program for current and future beneficiaries. Time is short for the Senate to do the same. The Senate should take action and vote on a companion bill to the “Fighting Fraud to Protect Care for Seniors Act of 2018.”
Ken McEldowney is the executive director of Consumer Action.
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