Why you care about insurance fraud

Every time I go to the dentist, the receptionist panics. Then she asks for my birthday and address and scans my file carefully. It seems that this dentist office has another patient with my name. So what’s my gripe? Even with the red flag the office has on my chart, the receptionist has never asked to see my identification. She has never asked me to confirm when I last received treatment. And the office has yet to attach a photo to my chart so that she can see at a glance if she has the right person.

My dentist’s office realizes that it would be bad (thus, the panic) if they mixed my chart up with someone else’s. But they assume that I am who I say I am and that I’m trying to help clear up the confusion. It has not occurred to them that someone might pose as me to get treatment they can’t afford. The fact is, though, medical ID theft — where someone poses as someone else in order to make an insurance claim — is a huge problem. The World Privacy Forum estimated in 2006 that 250,000 to 500,000 people were victims of medical identity theft. That’s an old number and probably an underestimate because it’s hard to get accurate numbers on fraud. But according to James Quiggle, spokesperson for the Coalition against Insurance Fraud, “Medical ID theft is the fastest growing form of identity theft in America today. It is taking off like wildfire and posing a serious health threat to consumers.”

Stemming the problem

Yesterday the FTC held a Town Hall Meeting in Washington, D.C., to discuss this epidemic problem. And in June, the Coalition Against Insurance Fraud, the National Health Care Anti-Fraud Association, and the National Insurance Crime Bureau — with participation from the FBI and Department of Justice — announced a joint project called the Consortium to Combat Medical Fraud. Its agenda is to aggressively pursue the perpetrators of medical fraud.

So why should you care if insurers are being defrauded?

If someone poses as me to get access to my medical care, they not only cost my insurer money, they pose a health risk for me — with untold repercussions. If the poser uses my insurance to have a baby or have her appendix removed, she alters my medical records. Now my medical history says that I have a baby that I don’t have or that I don’t have an appendix I do have. If I go to the hospital with a ruptured appendix, I’m very likely to be misdiagnosed. The baby? Check out this video to see how badly that can turn out:

But this form of ID theft is just the tip of the iceberg. “The big money is not in the free treatment scam,” says Quiggle. “But rather in the large-scale theft of patient lists by medical insiders. A low-paid data-entry clerk with too much access to patient databases can make a lot of money — as much as $50 per name — stealing names and selling them to criminals.” These are usually paper crimes where no one got any actual treatment. The insurance companies are billed in large quantities for the same treatment. But even though no treatment was performed, this muddies your medical records. “We are not talking about scams of overpriced cotton balls,” says Quiggle. “These are surgeries you never had.”

The weak link

The small medical practice is one of the weak points in the system. Like my dentist, these offices are run by medical professionals, not necessarily experts at data security or management. That they often don’t ask for an ID or take other obvious measures against ID fraud is one thing to worry about. (And some practices are starting to correct this.) But how much do they know about that clerk they hired to catch up on their backlog of insurance paperwork and data entry?

There is little — beyond sharing my knowledge when I visit my practitioners — that I can do to prevent my name from being stolen by a clerk at my doctor’s office, but there is a lot I — and you — can do if my name does end up in one of these fraudster’s hands. There are lots of details on this at the World Privacy Forum.

But for starters, here is a quick list of things you can do to keep an eye on your medical ID:

• Closely monitor any “Explanation of Benefits” your health insurer sends. Make sure you received all the treatments they are paying for. If you see any discrepancies, call your insurer and your medical practitioner immediately and file a police report.
• Ask your health care providers for a copy of your file so you can check that you received all the treatments on record. Or, since many don’t like to give those out, simply ask when you were last in and what treatment you received every time you go to a practice.
• Keep an eye on your credit report.
• Share your knowledge of this threat with the medical practices you visit and suggest that they add a photo to your database or ask patients for identification. This isn’t a perfect solution. But my pharmacists started doing this recently and told me that several times a week someone claims they left their ID in the car. And never returns.
• If your insurance is used in a false claim, write to your insurer and detail what’s wrong about your records. Under HIPAA, it can be very difficult for you to make changes to your medical records. “But you can at least have your side of the story added to the records,” advises Quiggle. “At least then doctors are on notice and they will be on high alert that there may be inaccuracies in your file.”