Medical ID theft a threat to privacy, health and finances
Medical identity thieves steal a name, insurance information, Social Security Number -- and use it without its real owner's knowledge to get medical services or, more commonly, to apply for credit.
"Consumers' medical insurance information is quickly becoming as valuable as their financial information," said Scott Mitic, chief executive of TrustedID, an identity theft protection company. "The economy for personal information has really matured over the last ten years, and institutions like banks that had the most to lose started doing a much better job of protecting data."
Now, he says, thieves "go where the cap on resistance is the least and where the financial opportunities are the greatest."
Electronic medical records are one of those opportunities. According to a new report by market research firm Javelin Strategy & Research, data theft related to exposure of medical records rose in one year more than 100%, from 3% in 2008 to 7%, or 275,000 cases, last year.
Once hijacked medical information is in the hands of scammers, there's no shortage of ways it can be put to use. In some cases, a medical employee steals patient credit card information and goes on a shopping spree. Others, more seriously, use a stolen identity to submit bogus claims to insurers and falsify medical records to support those claims.
"In cases where the goal is to defraud insurance companies, the thieves are usually savvy individuals who are part of a syndicated effort. But the theft usually originates with low-tech person-to-person communication," said Mitic.
Seniors, who typically use more health care services, and may not be as aware of identity theft risks, are the most likely victims of this type of fraud, and also the most susceptible to deceptive persuasion. As recently as last month, a Medicare phone scam in several states targeted elderly consumers by pressuring them to divulge personal details on the pretext they were being issued new Medicare cards. A doctor's office calling on the phone saying they're updating your insurance information is "a classic scam," Mitic says.
In one Medicare scheme, reported first in the NY Daily News, a 72-year-old woman from Grahamsville, NY, learned she had become the victim of medical ID theft when she began receiving insurance bills. The paperwork showed the senior had a pregnancy test, a prostate exam, and a semen analysis. Bureaucratic hurdles prevented her from stopping the fraud, despite that she repeatedly called Medicare to alert the agency. At the end of her three-year battle with federal insurers, the total fraud in her name came close to $50,000.
To prevent medical ID theft, consumers need to be vigilant, both proactively and reactively. Treat medical insurance information like a Social Security information and think of it as equally valuable. Check medical benefits statements as diligently as credit card statements. Consumers also have the right to request an annual disclosure record from their insurer.