What is it and Histroy
Medical identity theft occurs when the fraudster uses the medical insurance of the victim. Most victims fail to notice this type of identity theft because the bills are sent to the insurance company and the provider of the medical services has been given a false address for sending bills to the fraudster. This type of identity theft can cause far greater harm than just the increased insurance premiums. In today’s computerized world, your medical records are becoming digitized and available to various providers of medical services. A doctor or hospital could provide the incorrect treatment or refuse treatment based on false information in your medical records. Some of the signs of medical identity theft include: items on your explanation of benefits (EOB) that you do not recognize including procedures and doctors, a bill for medical services you did not receive, calls from collection companies for unrecognized medical bills.
Medical identity theft can occur in a number of ways. The most basic is an identity thief using your medical ID number to receive medical services while avoiding paying for the services, usually because they can’t afford to purchase their own insurance. Another form of medical identity theft occurs when criminals set up fake doctor’s offices or pharmacies and then bill the insurance companies for products and services that were never provided. The other common type of medical identity theft is drug addicts using your medical ID number to obtain prescription drugs. Some drug dealers have even been caught doing this and then selling the drugs on the street.
One issue with medical identity theft is that under current law, many victims do not have the right to review their medical files or correct errors in the files. HIPPA rules make it difficult for individuals to discuss their medical information and find errors. Also, victims of medical identity theft do not have the legal right to prevent health care providers, insurance companies, and medical clearinghouses from re-reporting any information that was originally reported due to the identity theft. With medical identity theft the criminal doesn’t need your Social Security number. If they can get your medical ID number, date of birth and address, which is usually enough information to commit the crime.
The Ponemon Institute in its Fifth Annual Survey on Medical Identity Theft reported that the average cost to clear up an issue of medical identity theft is $13,500. NBC News reported instances of medical identity theft in 2014 exceed 2.3 million victims. Since the passage of the Affordable Care Act there has been an increase in medical identity theft. The most common way for criminals to obtain your health insurance information is by hacking government computers, insurance company computers, hospital computers, pharmacy computers, and computers in doctors and other provider’s offices.
In addition to the financial costs the costs of medical identity theft could be life threatening. Cases of individuals being administered drugs that they were allergic to and even being given the wrong blood type in emergency situations have resulted in death because the wrong information was entered into the computer when the identity thief used their medical ID and the hospital relied on the medical records in the computer. In another case a woman used a stolen medical ID to cover the costs of the birth of her child. The identity thief’s drug test came back as positive for illegal drugs so child protective services removed the victim’s children from her care because she was a drug addict. The victim then had to go to court to get her children back.
To help reduce the risk of medical identity theft you should avoid carrying your medical insurance card with you. Keep your insurance locked up in a safe place and only take it out when you go to a new doctor or provider. For emergency situations make a copy of your insurance card but black out the identification number. Let the emergency room know you will provide them with the number once you get home, then you can call them at the phone number they give you to provide your insurance number. Be especially careful of Medicare and Medicaid cards because the insurance identification number contains your Social Security number.