Most people know that if their wallets are stolen, they need to call their credit card issuers and cancel their cards. Ditto with their driver's licenses and debit cards. But it might never occur to them to call their health insurance providers to report the theft of their health insurance identification cards.
It should. In the same way that a thief can steal your identity to open credit card accounts and rack up huge bills in your name, a thief can also steal your medical identity to run up tens of thousands of dollars in medical bills. Once your insurance company pays its portion, the balance will be charged to you.
Medical identity theft is defined as the theft or unauthorized use of a person's personal information to obtain unauthorized medical goods and services, says Byron Hollis, managing director of the national anti-fraud department for the Blue Cross Blue Shield Association. Sometimes, it's a family member who doesn't have health insurance who uses your card to get medical treatment. But it's just as likely to be an "opportunistic burglar" who then uses a health insurance card to try to get drugs from a doctor or a crooked doctor who bills for services he didn't provide. It could even be organized theft ring that sets up fake clinics to bilk insurance companies for payment on nonexistent treatment, or obtains medical equipment that it then sells on the black market.
"Organized groups are certainly more dangerous," Hollis says, "but from a personal level, even an opportunistic theft or unauthorized use by a family member can be devastating financially to you or to your medical records."
The impact of medical identity theft
While medical identity theft is similar to financial identity theft, it's far more difficult to resolve. Identity theft is often discovered early on the financial side because credit card issuers have sophisticated systems for detecting fraudulent use of credit cards. Plus, nearly all financial institutions use one or more of the three credit reporting agencies.
"There's not a centralized repository for medical records," says Jeremy Miller, director of the investigation and restoration center for Nashville, Tenn.-based Kroll Fraud Solutions, which works with businesses and consumers to address problems related to identity theft. "To be able to have something like that could potentially reduce the risk of becoming a victim or reduce the recovery time. It's important to know this may not be a problem that goes away."
Every time a thief uses your medical identity to obtain medical care, it creates records with their medical information that could be mistaken for yours -- a different blood type, a history of drug or alcohol abuse, test results that aren't yours, or a diagnosis of an illness you don't have.
"It can create a very dangerous situation," Hollis says.
It can also create a health insurance crisis for you by exhausting your insurance benefits. "Most policies have a lifetime cap," Hollis says. "If you're already accessing medical coverage, you can burn through that in a short period of time."
Plus, it could create problems for you if you ever apply individually for health insurance, disability insurance or long-term care coverage. Unlike credit reporting agencies, health care providers are not required to delete or correct incorrect information on your medical records. They'll typically amend your records with a notation that some information may be suspect, but that's about it. An insurer might want to exclude covering you for treatment of a condition because your medical record indicates it's a pre-existing condition. Even worse, you could be turned down for coverage.
Uncovering medical identity theft is tough
Most people never find out that they've been a victim of medical identity theft until they get a notice of an unpaid bill for medical care they never received. By then, their credit is already damaged. That's nothing, however, compared to the case of a Salt Lake City woman who learned that her medical identity had been stolen when a state social worker and a police officer showed up at her house to take custody of her children.
"They said she'd abandoned her baby at the hospital," says Alex Johnson, a former special investigator with the FBI who now heads up a special investigative unit for Regence Group, the largest health insurer in the Northwest/Intermountain region. "Seven or eight months earlier, her purse was stolen. The lady who stole her purse was a drug seeker who was pregnant. She used the woman's ID to have the baby. A couple days later, she deserted the baby and took off. The information they had was on this woman."
The best chance for early detection of medical identity theft is to do what hardly anyone does -- actually read the Explanation of Benefits, or EOB, statement that your insurance provider sends you after you've received covered treatment.
Look for the name of the provider, the date of service, and the service provided. Sometimes, the fraud is obvious. If it says Dr. John Smith performed surgery on you on Nov. 14 and you were on a Caribbean cruise that week, you know you're a victim. But if you went to Dr. Smith that day and he gave you a shot of steroids for frozen shoulder, the insurance codes classify that as a surgery. Call your insurer's customer service number if something doesn't seem right.
Also, exercise your right to a free annual copy of your credit report. Most medical identity theft first shows up when the claim makes the transition to the billing department. If you have an unpaid medical bill on your credit report, that's a major clue that you're a victim. Another freebie is an annual benefits request to your health insurer; that will give you a list of all the benefits paid in your name for the year.
Another method for checking comes courtesy of Trisha Torrey, an About.com guide and newspaper columnist who focuses on patient empowerment. "Each time you make a doctor's appointment," she says, "ask them to verify the last time you were there." If the dates don't match your own records, call your insurance company and report your suspicions.
You can also check for discrepancies with the Medical Information Bureau. Hundreds of health-related insurance companies belong to this bureau, which collects personal information about individuals who apply for health and life insurance in much the same way that the credit bureaus collect financial information for credit issuers. It's far from comprehensive; it only collects information on people who apply for coverage individually. However, Torrey says, "they can be an entry to any other health-related organizations that might have your bogus information or stolen information."
Preventing it may be tougher
The tips for preventing medical identity theft are similar to those suggested for financial identity theft, such as shredding documents with your health insurance ID number on it instead of throwing them in the trash. Protect your insurance card and insurance information "just like you do your financial information," Hollis says. "Know where it's at and check it every once in awhile to make sure it's still in your wallet."
Practice "situational awareness" at the doctor's office or pharmacy, he says, paying attention to who's nearby when you're giving the staff your insurance card. Don't leave it sitting on the counter in plain view. Also, make sure you have an up-to-date firewall on your computer.
Preventing medical identity theft gets tough, though, because so many people have access to the information after it leaves your hands.
"It's so simple to do," Torrey says. "You've got all kinds of low-paid personnel working in a doctor's office and the cards are getting photocopied all the time."
Bottom line: If you're a victim, don't beat yourself up about it. The chances are pretty good that the deed happened after the information left your hands.
What to do if you're a victim
First things first: Call the police and report it. You're a victim of fraud. Also, call your insurance company and ask for the fraud department. They'll shut down your health insurance account, issue you a new card, and help you work through the process of dealing with any bill collectors and correcting the erroneous information that's now on file about you. Hollis says he'd prefer that customers call his department before calling the medical provider that generated the bogus claim. While that might seem like the natural thing to do, he points out that someone in that office -- even the person who answers the phone -- might be in on the scam.
"It would certainly help us in the investigation if the provider is not alerted," he says.
Also, contact the three credit bureaus, your bank, and your credit card issuers. Let them know your medical identity has been stolen so you can start cleaning up your credit.
Request access to your medical records from your health insurer and your health care providers. The World Privacy Forum has a detailed FAQ on the process. Among the steps to take is a request for an accounting of disclosures. This will help you find out who has information about you and, hopefully, correct it.
Finally, Torrey says, "make notes everywhere that it's been stolen with a phone number people can call to get the right information. If you're in an accident and can't answer questions, they could pull up the wrong information."
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