Protecting Your Health
Medical identity theft, which is fast-growing, could cost you your life
The waiting room is almost empty, and you expect to be seen by your doctor shortly. The receptionist calls your name, and you promptly hand over your insurance card. But after staring at her computer screen for what seems like an unusually long period of time, she says your benefits have been exhausted.
“How can that be?” you respond, dumbfounded. “I haven’t been here since my last physical!”
This is when you realize you’ve become a victim of medical identity theft. Someone has stolen your name, insurance information and Social Security number to obtain medical services, prescription drugs or medical equipment.
Medical identity theft is one of the fastest growing areas of criminal fraud, with scammers and organized criminal gangs bilking the U.S. health care system of an estimated $100 billion dollars each year, according to the National Health Care Anti-Fraud Association. The Medical Identity Fraud Alliance estimates that almost two million Americans have been victimized in 2013 alone.
“One of the most common forms of medical identity theft we see is where a thief takes someone’s Social Security number and health insurance information and begins billing for services not provided to that individual,” says Jonathan Ishee, an assistant professor at The University of Texas Health Science Center at Houston (UTHealth) School of Biomedical Informatics. “By far we see it the most in the Medicare population because most of the time these people are over 65 and traditionally access health care at a higher rate than younger individuals.”
Sometimes, the fraud is committed by an uninsured person with a medical condition. This person steals the Social Security number and insurance information of an insured person in order to visit a clinic or get prescription drugs. However, Ishee says this type of fraud makes up a relatively small percentage of the reported crimes. As more baby boomers become Medicare recipients, criminals are increasingly finding this population a fertile ground for running scams that ultimately leave U.S. taxpayers on the hook for billions of dollars in fraudulent claims.
Medical identity theft exacts more than a monetary toll. It can involve tampering with the patient’s medical information, interfering with prescribed treatment and jeopardizing the patient’s health. Experts warn of serious risk of injury and possibly death if one person's medical information is entered into another patient's record leading to a potential misdiagnosis or incorrect treatment.
“One of the problems is that, on the front end, there’s not a lot of checking to ensure the patients are who they say they are,” Ishee says. “Think about it. When you go to see your health care provider, you go in with your insurance card. Most cards don’t have your picture on them. Unless you’re a repeat customer or the hospital or doctor’s office staff knows you, there is no matching of a face with a name. So it’s hard to detect that type of fraud until after the services are provided.”
Ishee says one of the most outrageous examples of fraudulent identity use involved a 70-year-old woman billed for child-birth expenses.
Medical fraud also costs the victim time and resources needed to rectify the situation. To make matters worse, Ishee says, the onus of proving the fraud often falls on the victim.
“If you have people out there continually getting services, buying products or opening up credit cards in the victim’s name, it can be very hard to get it all straightened out,” Ishee says.
Gaming the Medicare system
Falling victim to an organized crime gang that is complicit with a health care provider or a provider staff member is even more insidious and difficult to correct. Such crime mostly involves fraudulent Medicare claims after the provider or a staff member steals the patient’s Medicare information and colludes with a third party to bill for services or products, including expensive medical equipment such as wheelchairs and scooters.
For example, the criminals will order a wheelchair for someone who doesn’t need it, bill Medicare for two to three times the cost of the equipment and pocket the money. These highly organized groups often set up a shell company for billing purposes, and the phony company disappears at the slightest hint of an investigation by authorities.
“Lots of times, people don’t steal this information without having someone on the inside,” Ishee says. “Health care is a very personal exchange because you have to actually go to see the physician. So they need someone on the inside who isn’t going to say anything.”
Another form of medical fraud involves Medicare beneficiaries loaning or selling their cards to a third party so that services or equipment can be purchased and billed to Medicare. Miami, Fla., with its large population of Medicare beneficiaries, is a hub for scammers, and officials say Houston also is becoming a popular feeding ground, according to Ishee.
With millions of uninsured Americans signing up for insurance under the Affordable Healthcare Act and more health records being maintained electronically, the number of potential medical identity theft victims is expected to increase. But Ishee says it’s not known what impact the new law will have on the prevalence of medical fraud.
“On one hand, with the individual mandate, the idea of someone loaning their information to someone who doesn’t have insurance will go away because everyone should have insurance,” Ishee says. “But you could argue that if everyone has insurance, the pool of people with benefits will be larger, and so the temptation for nefarious providers to bill for services never provided could increase. Time will tell.”
Vigilance pays off
Medical identity theft is a federal crime punishable by jail time and fines. State departments of insurance also are involved in investigating these crimes.
The U.S. Department of Health and Human Services offers the following tips for avoiding medical identity theft:
- Guard your Medicare and Social Security numbers carefully.
- Be suspicious of anyone who offers you free medical equipment or services and then requests your Medicare number.
- Do not let anyone borrow or pay to use your Medicare ID card or your identity.
- If your Medicare card is lost or stolen, report it right away. Call Social Security at 1-800-772-1213 (TTY 1-800-325-0778) for a replacement.
- Hang up the phone if someone calls you claiming to be conducting a health survey and asks for your Medicare number.
- Don’t give information to telephone marketers who pretend to be from Medicare or Social Security and ask for payment over the phone or Internet.
Ishee also urges diligence in examining medical bills, explanation of benefits or the Medicare Summary Notice sent from the health care provider. As you check these items, ask yourself the following questions:
- Were you charged for any medical services or equipment that you didn’t get?
- Do the dates of services and charges look unfamiliar?
- Were you billed for the same thing twice?
- Does your credit report show any unpaid bills for medical services or equipment you didn’t receive?
- Have you received any collection notices for medical services or equipment you didn’t receive?
Federal law gives you the right to see your medical file. If you suspect your information has been stolen, contact each provider from which a thief may have used your identity and ask to see those records.
“It’s especially important to review your explanation of benefits if you haven’t been to the doctor in a few months and you receive one out of the blue,” Ishee says. “Call your insurance company immediately if you suspect fraud.”