Medical identity theft a growing problem: Survey

Medical identity theft is a growing problem, but many of the victims know the thief and do not want to report him or her, says a survey released Thursday.

The number of victims affected by medical identity theft increased by an estimated 19% over the past year, to 313,000 new victims, and generated more than an estimated $12.3 billion in out-of-pocket expenses in 2013, according to the 2013 Survey on Medical Theft, which also reflected data from government agencies.

The survey was conducted by the Traverse City, Mich.-based Ponemon Institute and sponsored by the newly formed Washington-based Medical Identity Fraud Alliance with support from Portland, Ore.-based data breach prevention and response specialist firm ID Experts.

For purposes of the study, medical theft occurs when someone uses an individual's name and personal identity to fraudulently receive medical services, goods and/or prescription drugs, including efforts to commit fraudulent billing.

According to the survey of 788 adults who self-reported that they or close family members were victims of medical identity theft, the crime happened 30% of the time because the victims knowingly shared their personal identification or medical credential with someone they knew, and 28% of the time because a family member took their personal identification or medical credentials without consent.

The survey found that 50% of the respondents were unaware that medical identity theft can create inaccuracies in their permanent medical records.

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Of those who tried to resolve the incident, 35% said they worked with their health plan and/or insurer, and 31% with their health care provider. This took almost or year more, according to 36% of the respondents, and 48% said the crime is still not resolved.

Robin Slade, development coordinator for the Medical Identity Fraud Alliance, said she hopes employers will help their employees understand the steps they can take to reduce their exposure to fraud, including talking to them about reviewing their insurers’ explanation of benefits “and why they should protect their medical insurance cards and safeguard their insurance-related paperwork, and what to do if it’s lost or stolen.”

Ponemon Institute Chairman Larry Ponemon said, “It’s not in the employer’s interest to have fraud of any kind,” so clearly firms can educate their workers on this issue. Employers can also work with companies that are developing stronger identification credentials, such as identification cards that contain microchips, so there is a more effective authentication process, Mr. Ponemon said. This must be done in conjunction with the health care insurer, he said.

Copies of the survey are available here.

Ms. Slade said the Medical Identity Fraud Alliance is a public-private partnership that includes health plans, health providers, technology firms and other service providers and is intended to address the issue of medical fraud.