Medical identification theft involves taking someone’s name, Social Security or Medicare number or other personal information to obtain medical treatment, purchase medications or falsely bill Medicare or insurance companies.
According to the Ponemon Institute’s “Fifth Annual Study on Medical Identity Theft” (February 2015), an estimated 2.32 million Americans were victims of medical identity theft in 2014. This represents a 21.7 percent jump from the previous year. The Medical Identity Fraud Alliance says, as of June 2015, incidents of medical identification theft have doubled since 2010.
Ramifications of Medical ID Theft
Lost Money and Time
The Ponemon Institute reports that, in 2014, 65 percent of its survey respondents spent an average of $13,500 due to medical identity theft. Some victims had to reimburse the medical provider or insurer, obtain lawyers for a solution and prevention of future fraud.
Victims of medical identity theft lack protections afforded those targeted by practitioners of financial fraud. Liability for unauthorized use of credit cards is capped at $50.00 if the use is timely reported. Those who have suffered bank account breaches may have rights to reimbursement from the bank.
According to the Ponemon Institute, victims spent on average 200 hours to achieve a successful resolution of their problems. Privacy laws require the victim to participate significantly in solving the crime and interact extensively with providers and insurance companies.
Exposure to Criminal Prosecution and Health Risks
Medical ID fraud artists often submit bogus claims to government or private insurers and wrongfully obtain services and prescriptions. The victims of these criminals may find themselves potentially investigated or branded as criminals.
Perpetrators submit their own or phony histories and conditions to providers. The co-mingling of faulty information with the legitimate information of the victim increases the risks of misdiagnoses, incorrect treatment and even more serious or life-threatening illnesses.
Causes for the Rise
Hackers Turning to Health
The health and medical field is a fertile source for medical identity thieves, especially hackers. According to the Identity Theft Resource Center, 2015 saw 781 data breaches in the United States, of which 35.5 percent occurred in the health and medical sector. This was actually down from a record high of over 44 percent in 2014.
Federal law encouraged and, subsequently due to the Affordable Care Act of 2010, required medical providers to electronically store and maintain medical records.
Hackers and thieves have found the medical sector more vulnerable to hacks than the retail and financial industry. Retailers increasingly accept “chip cards” from customers as a form of payment. The chip creates a unique transaction code that hackers cannot replicate, unlike the magnetic strip of credit cards that allow repeated use. As a result, thieves find the medical sector more vulnerable for their intrusions.
Significant “black market sales” also spurs medical hacking. Forbes magazine reports that black market purveyors could fetch $60 to $70 per person’s medical information, against only a $1.00 for a person’s Social Security Number.
Among Family and Friends
Medical identity theft is not the exclusive province of strangers. According to the Pomenon Institute’s survey, one in four allowed a family member, friend or trusted acquaintance to use his or her own personal information to get medical care. Such use constitutes a crime.
Among the respondents who admitted permitting someone to use their identity, 91 percent said the authorized user did not have health insurance. The user’s inability to afford medical services accounted for 86 percent, while 65 percent reported emergencies as a reason.
Unauthorized use among family and friends accounted for 24 percent of the incidents.
Stopping The Fraud
Examine medical bills sent to you, credit reports and “Explanation of Benefits” statements from your insurer for any services, prescriptions or dates you don’t recognize. Look for duplicate charges for the same item or visit. Contact the medical provider if you question the bill. Report suspected fraud to Medicare, Medicaid or your insurer.
Avoid furnishing Social Security, Medicare/Medicaid or insurance numbers at events billed as health fairs or free health clinics. You may become, not only a victim, but criminal by voluntarily furnishing your identity for others to get medical care or prescription.
Be aware of clinics that lack medical equipment or forego blood pressure, temperature and other basic vital sign checks. Thieves can glean your medical information from social media posts by you or others about upcoming surgeries or appointments.