Escalating Health-Care Costs Fuel Medical Identity Theft

[R.A. Hettinga]

<http://online.wsj.com/article_print/SB119206024712655344.html>

The Wall Street Journal


Escalating Health-Care Costs
Fuel Medical Identity Theft
Patients Are Told
To Guard ID Cards
Like Other Plastic

By VICTORIA E. KNIGHT

October 11, 2007; Page D3

When a wallet is lost or stolen, the first thing most Americans do is call
their credit-card company. But if health-care ID or pharmacy cards are
among the missing items, you should also alert your insurer.

Medical identity theft -- in which someone uses your name and health
insurance without your knowledge or consent to obtain medical treatment,
prescription drugs or goods -- is on the rise. At least a half-million
Americans have been affected, according to Pam Dixon, executive director of
the World Privacy Forum, a San Diego research group that focuses on privacy
issues.

Medical identity theft can imperil your health and finances. Unfortunately,
detecting this form of thievery isn't always easy for consumers, who are
often unaware of its existence, and remedying the damage can be difficult.
However, there are steps to take to protect yourself from becoming a
victim, experts say.

"You need to treat your medical ID card as if it were a Visa card with a
million-dollar credit limit," says Nils Frederiksen, a spokesman for the
Pennsylvania attorney general's office, which has successfully brought
prosecutions against medical ID thieves.

Escalating health-care costs and the growing ranks of the uninsured are
fueling this fast-growing fraud. Before he was caught, Daniel Sullivan, an
uninsured Pennsylvanian, racked up more than $144,000 in medical bills at
five hospitals posing as an acquaintance whose insurance information he had
stolen.

In addition, drug addicts in search of their next high -- or treatment for
methamphetamine-related illnesses -- are committing medical ID theft,
according to a report published in May by the Department of Justice's
National Drug Intelligence Center.

With health-care benefits becoming an increasingly valuable commodity,
criminal gangs are getting in on the act. Often it's an inside job where a
worker in a hospital or doctor's office steals patients' identities en
masse and sells them to criminals who then use them to obtain payment for
fake procedures.

"It's a very lucrative crime," says Mike Stergio, director of Aetna Inc.'s
special investigation unit. The number of cases the health insurer is
investigating has doubled in the past year.

Mr. Stergio is currently investigating a case in which Aetna was hit with
claims totaling $3.5 million over a two-week period for treatments
supposedly provided to 400 of its members. The sheer volume of claims and
suspicious patterns of procedures -- four colonoscopies in one family --
prompted the insurer to investigate and freeze payments.

One of the biggest threats posed by medical identity theft is that victims
can receive the wrong medical treatment based on the fraudulent information
in their medical records. (You are allergic to penicillin, the imposter
isn't.) In addition, theft can cause victims to fail pre-employment medical
exams or become uninsurable. (What about that cancer diagnosis?) And their
credit can become badly damaged. At a broader level, health-care fraud
leads to higher health insurance premiums, higher taxes and higher
co-payments.

People are often unaware their identities have been stolen, since scammers
usually change the home address to which medical bills are sent. And it can
be hard to set the record straight because the law offers few protections.

The Health Insurance Portability and Accountability Act grants all patients
the right to access their medical records, generally within 30 days.
However, the law's privacy provisions can actually hinder victims. In some
instances, a request for access by the victim has been denied because the
actual patient -- that is, the criminal -- was another person, according to
the World Privacy Forum.

"While victims of financial identity theft can put a security freeze on
credit bureau reports, victims of medical identity theft sometimes can't
even get access to their health files," Ms. Dixon told delegates at the
American Health Information Management Association.

The World Privacy Forum's Web site1 provides a detailed guide on how to
gain access to your medical records and seek amendments, including sample
letters that you can send to health-care providers.

If your health plan gives you the option to monitor your benefits online,
as Aetna does, sign up for a password-protected account, Mr. Stergio
recommends. That way you can keep tabs on your health benefits in much the
same way you do for financial transactions in your bank account.

If you see a problem, contact your insurer immediately. Once alerted,
insurers can remove information from your records that could affect payment
for future treatment. For example, if the imposter had an appendectomy in
your name and you later need one, the insurer won't pay again for the same
operation. Also, any treatment an undetected thief receives in your name
eats into your lifetime maximum benefits.

Beware of "free" medical services or treatments. Sometimes illicit entities
use the lure of free services to obtain patient names and insurance
information for use in submitting fraudulent claims. Always question what
is being offered and who is paying the cost. If you aren't satisfied with
the answers, decline the offer.

"If you go into a clinic for a free checkup and they ask to see your
insurance card, run for the exit," says Byron Hollis, national antifraud
director for the BlueCross BlueShield Association. The elderly are often
the targets because they tend to be more trusting and carry Medicare cards,
which to criminals are like gold.

Other tips: Don't give your insurance information to telephone marketers or
door-to-door solicitors. And make sure you aren't overheard or spied on
when giving sensitive information to medical staff.

It's also important to carefully read the explanation of benefits that your
insurer sends you after you have received health-care services. Incorrect
group or identity numbers are red flags, as are the names of medical
facilities or procedures listed that you don't recognize. You can find more
tips on reading your explanation of benefits at the BlueCross BlueShield
Association's Web site2.

Consumers should also monitor their credit reports for claims filed by
health-care providers, says Adam Levin, co-founder of Identity Theft 911
LLC, a company that helps individuals and companies resolve identity theft
problems.



(1) http://www.worldprivacyforum.org/

(2) http://www.bcbs.com/


-- 
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R. A. Hettinga <mailto: rah at ibuc.com>
The Internet Bearer Underwriting Corporation <http://www.ibuc.com/>
44 Farquhar Street, Boston, MA 02131 USA
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