The Medical Identity Fraud Alliance (MIFA) recently published a wisdom paper titled “Healthcare Industry Wisdom on Medical Identity Fraud.” Thepaper summarizes insights from a variety of industry sources, including Generali Global Assistance, and is aimed at helping organizations protect their customers from medical identity theft and fraud.
MIFA defines medical identity fraud as “when someone uses an individual’s name and other personally identifiable information (PII) and/or protected health information (PHI) to fraudulently receive medical services, prescription drugs and/or healthcare goods … [or] when someone uses false identities for fraudulent healthcare billing.”
The most recent Annual Study on Medical Identity Theft, conducted by the Ponemon Institute and sponsored by MIFA and its members, show a year-over year increase of nearly 22 percent in medical identity fraud, producing almost half a million more victims in 2014 than in 2013.
Medical identity fraud poses substantial challenges to its victims, beyond those that typically affect victims of financial identity fraud. Out-of-pocket cost to victims is $13,500 on average; though, for some medical identity fraud victims expenses can be even more significant as there are currently no legal or regulatory consumer protections in place that limit the financial liabilities for this specific type of fraud. The Fair Credit Billing Act, which limits an identity theft victim’s fraud losses to fifty dollars, does not apply in many medical identity fraud situations.
Even more frightening than the financial effects of this type of fraud are the medical ones. Inaccurate medical records created by an identity criminal can threaten the victim’s future care and health. Fraudsters may exhaust the maximum limits of the victim’s health plan with false claims, precluding coverage in the event the victim has a medical emergency. There is also serious risk that victims’ medical records may become corrupted with information from the identity criminal, creating unsafe healthcare situations for victims when there is confusion about the victim’s true health status. Such situations can lead to misdiagnosis, mistreatment, delay in receiving proper care, being prescribed the wrong medication, and permanent or long-lasting errors to medical records.
Victims of medical identity fraud may even suffer reputational consequences when sensitive medical or health information is publicly disclosed, both in scenarios in which the divulged data is true or falsely added to their records via the fraud. For many, this disclosure can result in embarrassment; however, some victims also suffer employment issues, such as job loss, lost advancement opportunities, or loss of a professional license. Such consequences are more common when the victim’s employment is conditioned upon certain health-related conditions, such as being drug-free.
The startling growth and frightening effects of medical identity theft and fraud highlight how serious of a crime it is. MIFA details a number of important considerations organizations should take to help their customers protect against and resolve medical identity theft and fraud should they become a victim, including:
- The shifting landscape of healthcare data security
- Current fraud management practices
- Patient authentication and its role in preventing fraud
- Identity proofing
- Fraud mitigation planning
To learn more, read the complimentary executive summary of the wisdom paper or learn how to get a copy of the full wisdom paper on the MIFA website, and for additional identity protection insights, sign up for updates from Iris.