Medical Identity Theft Rising

by Joe on April 14, 2010

This article was featured on businessweek journal, and i thought it would create awareness to readers about the need to safeguard own identity- noting that hospital bills account for a great percentage of personal debts plus the stress it adds to  your life while trying to clear your name . Additionally, since healthcare reform is now a law, we will see a lot of digitization of patient data, and the threat to patient data security will also increase. The article is titled Stealing Your Identity for Liposuction 

Read on!

Sierra Morgan, a 31-year-old respiratory therapist from Modesto, Calif., was billed $12,000 on her health-care credit card in November for liposuction, a procedure she never requested or had. “It’s depressing to know that someone used my name and knows so much about me,” she says.

Brandon Sharp, 38, found more than $100,000 of unpaid medical bills on his credit report when he went to buy a home. The charges included $19,501 for a life-flight helicopter trip and emergency room visits he never made, says Sharp, a project manager for an oil company in Houston. “I’m as healthy as they come,” he says. He spent more than six months correcting his medical files and credit report and reversing the outstanding charges.

Stories like these are becoming alarmingly common. There were more than 275,000 cases of medical information theft in the U.S. last year, twice the number in 2008, according to Javelin Strategy & Research, a market research firm in Pleasanton, Calif. The average fraud totals $12,100, Javelin says. “If the health insurance is valid, they’ll treat you and not always check your ID,” says Jennifer Leuer, general manager of ProtectMyId.com, an identity-protection service sold by Experian, the credit reporting firm. “It’s becoming the credit card with a $1 million limit.”

Medical ID theft comes in a variety of forms. Thieves may impersonate a patient, as in Morgan’s case. Criminals can set up fake clinics to bill for phony treatments; and some medical workers download records to sell to people who will use them to commit fraud.

The problem is likely to worsen as more medical records go into digital form, a priority of President Obama’s health overhaul. Digitizing records saves money and can lead to improvements in care. “Having information available to physicians and caregivers is a life-and-death matter,” says Glen Tullman, chief executive of Allscripts, which sells medical records software.

DIGITAL AND PORTABLE

At the same time, digital files may be easier to steal. “Once files are in electronic form, the crime scales up quickly,” says Pam Dixon, founder of the World Privacy Forum, a nonprofit consumer-research group based in San Diego, which analyzed a decade of consumer complaints filed with the Federal Trade Commission and medical identity theft cases from the Justice Dept. “There are cases where someone has walked out with thousands and thousands of files on a thumb drive. You can’t do that with paper files.”

Medical identity theft is more than twice as costly as other types of ID frauds, says James Van Dyke, president of Javelin, in part because criminals use stolen health data an average of four times longer than other identity crimes before the theft is caught. Some thieves are able to change the billing address for a victim’s insurance so the victim is unaware of charges. The $12,100 average fraud involving health information is far higher than the average $4,841 for all identity crimes last year. Consumers spent an average of $2,228 to resolve health ID frauds, six times more than other types, according to Javelin.

The damage can go beyond the financial. In some cases, patients’ medical records have been altered to reflect diseases or treatments they never had, which can be life threatening in an emergency, says Dixon. And victims can find themselves denied care if their health coverage has been exhausted.

To guard against fraud, patients should request a copy of their medical files from their doctors after each visit, ask their insurer annually for a list of claims, and watch their credit reports, according to the World Privacy Forum. Dixon advises victims to file a police report and contact the Federal Trade Commission because it may help their case when asking a hospital or doctor to amend errors in files.

Sierra Morgan contacted the police and worked with the health clinic in Sacramento that had billed for the liposuction to capture the impersonator, who is in custody awaiting trial. “I wanted to catch her,” Morgan says. “What nerve she had, using my name to get liposuction.”

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{ 3 comments… read them below or add one }

Kevin@OutOfYourRut April 14, 2010 at 6:42 pm

Not to minimize a very valid point, but we’re subject to this in so many ways. Look at social security numbers–they were originally confidential between us and the IRS. Now everyone wants our number otherwise they probably won’t do business with us.

Then there are tax returns–another point of confidentiallity that banks often request/require in granting a loan. Credit cards–everytime we use one we open the possibility of identity theft.

We’re blessed to live in a time with so many advantages, but unfortunately, privacy is not one of them!

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Joe April 15, 2010 at 12:23 am

Kevin- I see your point and it’s very valid – I can’t even count how many times i fill my SSN in a year, and when you call a customer service to inquire about your bill … they want your ssn for identification.
Another person may argue that since digital data is possibly going to be encrypted, the paper data on the file is more unsecure than digital data. (a valid point also).. but it’s change in technology that shifts threat to a new and different level and we as consumers have to be proactive in protecting ourselves .

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Len Penzo April 16, 2010 at 10:47 am

Wow, Joseph. Very scary news. As I understand it, in a further loss of privacy, the new healthcare bill will also open up our entire medical records to the government so that they can gather data for making future health care decisions (a.k.a. rationing of care).

It’s bad enough that our insurance is compromised – but at least the financial impacts can be rectified. But what happens when our confidential and personal health data becomes compromised – once that genie is out of the bottle you can’t put it back in.

All the best,

Len
Len Penzo dot Com

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