Medical Identity Theft On The Rise

What is Medical Identity Theft?

Medical identity theft is on the rise. And sadly, it is much more difficult to guard against this type of ID theft, and much harder to clean up the havoc it can create for a victim.

The Medical Identity Theft Alliance estimates that over 2.3 million Americans have been victims of medical ID theft, and 2014 saw 500,000 more cases than the previous year. That bad news is sure to get much worse. The MITA’s latest survey was conducted in November, 2014, before the disastrous leak of 80 million patients’ personal health information from Anthem. And just yesterday, I read that an "error" on Amazon's Web Services platform exposed 1.5 million people's private medical records.

Criminals can use victims’ birth dates, Social Security Numbers, and the ID numbers found on insurance cards to obtain medical services and prescriptions at hospitals, clinics, and doctors’ offices. While medical providers today routinely scan your driver’s license, you may notice that they aren’t very diligent about verifying its authenticity.

A fake license that wouldn’t fool a liquor store clerk can be used to rack up thousands of dollars in health care costs very easily. Insurance cards, generally, don’t bear photos or signatures. Using stolen medical credentials, a crook may visit multiple hospitals, pharmacies, and doctors to obtain services and drugs – often narcotics.

The records of these transactions are added to victims’ health care records, and should be visible on your Explanation of Benefits letters, but bogus healthcare transactions often go undetected for months or even years.

The MITA’s survey found that the average victim did not learn of medical ID theft until three months after it happened, and 30 percent victims could not determine when their health care credentials were improperly used. Health care privacy laws force victims to be intensely involved in investigations of medical fraud.

Can't Get No Satisfaction

If you’ve ever challenged a hospital bill, you know how hard it can be to prove that you did not authorize or receive the treatment claimed. Only 10 percent of victims in MITA’s survey indicated they were “completely satisfied” with the resolutions of their cases. About 65 percent of respondents said they ended up paying an average of over $13,000 to resolve disputed claims.

MITA estimates that medical ID theft crimes are a $5.6 billion industry. Larry Ponemon, head of The Ponemon Institute that conducts MITA’s annual surveys, believes that “a medical record is considered more valuable than everything else" to cybercrooks. Credit cards expire and are replaced frequently, rendering them useless to fraudsters after a short time. But Social Security numbers and personal health information don’t change; a crook can use them practically forever.

There is no way to “freeze” health care credentials as one can freeze a credit card account. There are no centralized reporting agencies analogous to Experian, TransUnion, and Equifax that collect health care activity and can monitor it for suspicious patterns. Health care providers are trained to be helpful to patients, not skeptical of their identities.

In short, there are very few protections against medical ID theft and little help resolving its consequences. My 10 Tips to Avoid Identity Theft will help you safeguard your personal and financial records.

Aside from that, the most important thing you can do to guard against medical ID theft is reactive: read all of those “explanation of benefits” letters that come from your health care providers and insurance company as soon as they arrive. If you see anything suspicious, do not delay in challenging it.

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