Largely a family affair, medical identity theft on the rise

Survey finds this crime is on the rise and leads to average cost of $18K-plus to resolve

Medical identity theft is the act of using an individual's name and identity credentials, including insurance information, to fraudulently obtain medical care or medicine as well as to submit bogus bills. A survey out Thursday asserts such activity is up almost 20% vs. a year ago.

The “2013 Survey on Medical Identity Theft” asked about 43,000 people in the U.S. if they or family members had suffered this type of fraud and what it cost them. Almost 2% said they had experienced medical identity theft. Of these, 42% said they had private insurance, 24% had Medicare or Medicaid, and 21% were not insured at all, with the remaining respondents in the survey citing various health savings accounts, coop plans or other means to pay medical costs.

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Credit: Wikimedia.org

More than one-third of the victims of medical identity theft said they had to pay an average of $18,660 related to problems stemming from reimbursements to healthcare providers to pay for services to imposters, legal fees, or lapse in healthcare coverage.

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Half of the victims said they didn’t know that medical identity theft can create inaccuracies in their permanent medical records, which might even lead to misdiagnosis and medical errors in prescriptions. More than half of victims said they lost confidence in their healthcare provider following the loss of their medical credentials. However, most of the other victims said they had no financial or healthcare consequences after becoming a victim of medical identity fraud.

The survey, conducted by Ponemon Institute and sponsored by the Medical Identity Fraud Alliance with support from ID Experts, offered insight into how medical identity theft happens.

Some 30% of survey respondents admitted knowingly permitting a family member to use their personal identification card to obtain medical services and pharmaceuticals, the report points out.

“Fifty-three percent said they did it once. However, 21% could not count the number of times they shared their identification,” the report says.  

These respondents to the survey said they fraudulently shared their medical I.D. credentials as a way to help both family and non-family get medical care, often believing the person they were giving their ID to couldn’t afford to pay or had no insurance. The survey found the average age of respondents who admitted they share their medical credentials is 40 years old and had an average household income of $45,801.

Those who didn’t share their medical credentials were on average 36 years old with an average household income of $69,309.

Fifty-eight percent of those who shared are women, whereas the no-share group was 52% male, according to the survey. The type of insurance also factored in, with respondents who have private insurance less likely to share their medical credentials than those with government insurance.

Twenty-eight percent of the time, a family member took the personal identification or medical credentials without consent. Most of the remainder of the incidents of medical identity theft stemmed from personal information having been stolen, either through a data breach or an employee in the healthcare provider’s office stealing it, though 14% claimed they “don’t know” how it happened.

Survey respondents said they found out they were medical identity theft victims either when they somehow uncovered mistakes in their health records or saw errors in statements from health insurers and providers, or even a collection letter demanding payment. It sometimes led to an “adverse entry” on the their credit report.

Only 43% of the time is any crime reported, either because the victim knows the thief or they think the police would be of no help. Just over a third said they were “not harmed by the incident and didn’t want to make it a big deal.”

“Individuals rarely take steps to check their medical records,” the survey report notes. The survey suggests obtaining copies of records from the healthcare provider and checking the accuracy of forms sent by insurance companies.

The survey report concludes that medical identity theft is largely a “family affair” that results from sharing or stealing of personal identification among those people they know. This isn’t a new situation, the report acknowledges, but it brings real medical risks and financial consequences. The survey admonishes the government and healthcare organizations to “improve their authentication procedures to ensure imposters are not obtaining medical services and products.”

Ellen Messmer is senior editor at Network World, an IDG publication and website, where she covers news and technology trends related to information security. Twitter: MessmerE. E-mail: emessmer@nww.com

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