Medical identity theft is the billion dollar issue no one wants to discuss, yet it's a problem that only grows larger as healthcare costs soar. In 2006, between 250,000 and 500,000 American medical identities were stolen. In 2010, the Coalition Against Insurance Fraud reported that this number had jumped to over 1.4 million Americans.
With the instances of medical identity theft at an alarmingly high number, it's important to know how to protect yourself from becoming one of the unlucky victims. Here are tips on how to decrease the chances of your medical identity being compromised.
How Medical Identity Theft Happens
Medical identity theft is typically an inside job, according to the Miami Office of HIPAA Privacy & Security. Health checkups automatically mean filling out forms with Social Security numbers, date of birth and home address information. Once the medical visit is complete, patient files are passed off to under-paid workers for filing in the back office. Combine this element with easy access to confidential data and copy machines, and the temptation to walk out with saleable data can be overwhelming.
Organized gangs are another threat to medical identity safety. Last October, The New York Times (in "Real Patients, Real Doctors, Fake Everything Else") reported how a Los Angeles-based gang successfully bilked Medicare out of $100 million by matching stolen medical practitioner license numbers to legitimate Medicare patients whose identifications were also stolen.
Sometimes it's just a family member or close friend perpetuating the fraud, taking advantage of a readily accessible health insurance card or medical insurance number.
While some debate whether the current trend toward electronic medical records will only heighten the possibility of medical identity thefts, patients should not forget about the continued ease of low-tech theft options. Last year, The Sun-Sentinel reported that an emergency room worker walked out of a Florida hospital with data sheet printouts on approximately 1,500 patients. The information was later used to obtain fraudulent debit, credit and bank accounts.
Realizing the Theft
Think you might be a victim? The sooner medical identity theft is recognized, the faster you can act to minimize the damage. Several warning signs that confidential records are in jeopardy include:
A sudden rash of debt collector calls
Unfamiliar collection notices on credit reports
Unexpected and unusual medical bills
Claim denials due to maxed-out insurance coverage limits
- Healthcare denial for an unfamiliar medical condition
Tell debt collectors you are a potential fraud victim. Obtain the collection company name, contact information, the debt amount, the creditor name, contact information, account billing number and the dates of the unpaid charges. Use this information to complete an Identity Theft affidavit (available for download). Forward this affidavit to the collection agency and the credit issuer.
Contact your medical provider's billing office and request an investigation into the unusual charges or coverage denials. Get a list of all the medical benefits paid in your name and challenge any inconsistencies found.
File a police report. Send copies of the report to your health plan's fraud department, your healthcare provider and all three credit reporting agencies. Also consider filing a complaint with the Federal Trade Commission that uses the information to detect nationwide crime patterns.
Victims should keep in mind that medical identity theft is often tied to personal identity theft. Obtain copies of your credit report from all three reporting agencies (Equifax, Experian and TransUnion) and challenge any unusual discrepancies.
Establish a fraud alert on your credit report with any one of the three credit reporting companies (Equifax, Experian and TransUnion). Fraud alerts established with one agency will automatically flow through to the other two.
Consider establishing a security freeze on your credit reports that prevents anyone from opening new accounts without your direct approval.
Unfortunately, the cost of clearing compromised medical records is neither cheap nor easy. Victims typically pay almost $20,000 to clear their medical records -- in addition to paying off the fraudulent medical charges. Nearly half of those victimized have also lost their healthcare coverage altogether.
An Ounce of Prevention
Your best protection against medical identity theft is to set up roadblocks preventing this from happening in the first place. Here are five things you can do to reduce the chances of this nightmare from happening:
1. Read the Explanation of Benefits (EOB) from your insurance provider. Most people just toss this document in the trash, but it explains what medical treatments and services were paid on a patient's behalf. See something that's not quite right? Call the provider and ask for more details.
2. Get file copies. If the explanation of a strange EOB still isn't satisfactory, patients can request a complete listing of health benefits paid to date in their name. Another possibility is to obtain a complete set of their medical files, although this could get expensive if x-rays are included in the copy request.
3. Monitor annual credit reports. One way to catch potential trouble is to monitor your annual credit reports for any unusual collection claims and immediately follow up to clear them.
4. put the shredder to work. Shred all medical bills, statements and EOBs after you've reviewed them for accuracy.
5. Watch your online records. Patients enrolled in an online records system should make it a point to check the accuracy of their records several times per year. Highlight any odd entries and ask your provider for a more detailed explanation.
For some, these five steps may seem like unnecessary work. Yet as the number of medical identity thefts increase, more people will realize these are an effective ounce of prevention against a pound of expensive cure.
To learn more about how to protect yourself from unexpected medical expenses, check out these InvestingAnswers featured articles: How to Save 30% on Your Medical Bills Today and The Top Causes of Bankruptcy and How to Avoid Them.
Article image compliments of Xurble via Flickr.