Medical Identity Theft * Medical ID Theft * Identity Theft * Prevent * Identity Theft Victims * Stolen Identities

Medical Identity Theft -- Now THIS is Scary!

Last Updated: June 1, 2011

There is so much emphasis and information out there warning us about financial identity theft-- and not suprising, given that it is the fastest-growing crime in America. We don't seem to hear as much about medical identity theft, but this growing phenomenon can be even more devastating than it's close cousin.

What is Medical Identity Theft?

Medical identity theft is when another person utilizes your personal information to obtain prescription drugs, healthcare services, or even to collect money through fraudulent claims against your health insurance policy. Like other versions of identity theft, it can cause serious financial problems, not to mention an incredible hassle in your life which can go on for years. But in some ways, it's even worse-- if an identity thief tampers with your medical records, your chart could have the wrong history and diagnoses. Imagine the wrong allergin or blood type information being listed, for instance-- in this way, medical ID theft can become a life or death situation.

Is Medical Identity Theft Common?

According to a recent Ponemon Institute study published at the beginning of 2010, 5.8% of American adults have been a victim of medical identity theft. The average victim deals with more then $20,000 in costs associated with the crime.

This same study goes on to say 29% of victims don't find out about the ID theft until a year later with 75% of victims finding it difficult to resolve the issues.

Is Medical ID Theft Different from Financial ID Theft?

Victims of financial identity theft typically have a more well-defined path to recovery than those whose medical identities are stolen. Unlike financial identity theft, there's no straightforward process for challenging false medical claims or correcting inaccurate medical records. If a thug steals your wallet and runs up your credit cards with expenditures, you should request that the three major credit bureaus provide you a free credit report, place a fraud alerts on your accounts, and work with your creditors to get inaccurate charges removed. Identity theft is often discovered early on the financial side because credit card issuers have sophisticated systems for detecting fraudulent use of credit cards, in addition to the fact that nearly all financial institutions use one or more of the three credit reporting agencies.

With medical identity theft, it's not that simple. Your medical records are likely to be interspersed among a number of different providers, and there's no tri-merged or even single "medical records clearinghouse" that keeps them. Under HIPAA, the federal law that addresses medical privacy, you're entitled to a copy of these documents, though you may have to pay for it. If there's an error, you can add a correction to the record, but you can't have information deleted. And if you suspect you have been a victim of medical ID theft, healthcare providers may refuse to let you see your own record because once it's intermingled with another individual's record-- and ironically, that person's privacy must be protected.

How Does Medical Identity Theft Occur?

Uncovering medical identity theft can be a true challenge. 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, it's too late, the damage has been done. Here are just some of the ways that thieves take advantage of unsuspecting victims:

1. Insider Fraud. Medical ID thieves bill your health plan for fake or inflated treatment claims. The crooks often are employees inside the healthcare system who know how the insurance billing system works.
2. Obtain Free Treatment. Medical ID thieves who don't have their own health coverage often receive free medical treatment, courtesy of your policy. They assume your identity at a hospital or clinic, and your policy receives the bills.
3. Obtain Addictive Drugs. Medical personnel with access to your data may use your identity to obtain prescription drugs to sell, or feed their own addictions. Dishonest pharmacists might bill your policy for narcotics, or nurses may call in prescriptions in a patient’s name but pick it up themselves.
4. Organized Theft Rings. They buy stolen patient information on the black market, and set up fake clinics to bilk insurance companies for payment on nonexistent treatment, or obtains medical equipment that it then sells on the black market.

Medical Identity Theft Prevention

1. Read the Explanation of Benefits, or EOB, statement that your insurance provider sends you after you've received covered treatment. Confirm that the provider, date of service, and the service provided is correct, and of course that it was you. Amazingly, many people don't review these and they are a key early detection sign.
2. Request a complete list of payments made from your health insurance company on an annual basis-- and review it.
3. Be Aware when you are at the doctor's office or pharmacy-- just like when you are using a credit card, pay 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 for others to see.
4. Shred documents associated with your health insurance especially those containing your account number and personal information.
5. Do a periodic check for discrepancies with the Medical Information Bureau (MIB). The MIB is analogous to a "credit bureau" but collects health-related personal information as opposed to financial, and has a comprehensive list of insurance companies that belong to it. Any time an individual applies for life or health insurance, this information is likely to be reported to the MIB.
6. Get a current copy of your medical records in case they are tampered with in the future.
7. Exercise your right for a free annual copy of your credit report. Most medical ID theft is first noted when the claim makes the transition to the billing department. If you have an unpaid medical bill on your credit report that you don't recognize, you've probably been victimized.

Victim of Medical Identity Theft? What Should You Do?

1. Call the authorities and file a police report. Be sure to send a copy of the report to your insurer, medical providers and all credit bureaus.
2. Call your insurance company and report it. You will likely be put in contact with the fraud department, who should immediately disable your health insurance account, issue you a new card and account, and advise you through the process of dealing with any billing, collections or records issues that may have occurred.
3. Request access to your medical records. If you suspect you're a victim of medical ID fraud, get a copy of your records from your doctor, hospital, pharmacy or laboratory. If you find errors in your medical files, have them corrected immediately.
4. Contact the three major credit bureaus, your bank or financial institutions, and your credit card issuers. Inform them that your medical identity has been stolen. Place a fraud alert and credit freeze on your credit reports if you’ve been scammed.
5. File a medical identify theft complaint. File with complaint with the Federal Trade Commission (FTC) or call the FTC’s tollfree hotline at 1-877-IDTHEFT.
6. If you are refused access to your medical records, appeal. To appeal, follow the steps outlined in your medical provider’s "notice of privacy practices." (yes, those pieces of paper nobody reads). If you still aren’t satisfied, file a health-privacy complaint with the U.S. Department of Health and Human Services or call toll free 1-800-368-1019.

There may be worse consequences than the financial implications of medical ID theft; you could receive improper treatment because your medical records contain inaccurate information like the wrong blood type, test results that donÕt belong to you, treatment you never received, or diagnosis of an illness you donÕt have. If you've been a victim of medical identity theft, report it to your local police department and the Federal Trade Commission. You should place either a fraud alert or security freeze on your credit report to warn future businesses that you've been victimized. Finally, work with your insurance company and medical providers to clear your name of the charges.