In our computerized world, crime gets ever more conceptual… as with medical identity theft. This is a type of fraud that occurs when someone “steals” the identity of a person with health insurance and then uses his/her name — and, in the latest twist, insurance coverage — to get treatment that can include doctor visits, drugs and even hospital stays.
While insurance companies bear the financial brunt, this is by no means “not your problem.” If your medical identity is stolen, you and your family may pay a very high price. Your insurance coverage can get used up… unpaid bills can ravage your credit rating… and dangerous incorrect information can enter your medical files, making it difficult for health-care workers to accurately diagnose and treat you in the future — especially in emergencies when you might not have a chance to speak with them first.
There’s another kind of health insurance fraud that you have to be alert to as well — in which, appallingly, the criminal is your doctor. With this type of fraud, physicians may fabricate diagnoses… engage in a practice called “upcoding” (falsely billing for a higher-priced treatment than was provided)… or “unbundling” (billing each stage of treatment as if it were a separate procedure). These aren’t victimless crimes either — such fraud boosts the cost of health care, translating into higher premiums and out-of-pocket payments and reduced benefits or coverage.
Under the Radar
Health insurance fraud is a fast-growing and highly underreported type of white-collar crime, warns Eduard F. Goodman, JD, LLM, an expert in privacy and personal data protection law and chief privacy officer at Identity Theft 911, LLC in Scottsdale, Arizona. The most recent estimate from the National Health Care Anti-Fraud Association is that about 3% of annual health-care spending in the US goes down the drain in the form of fraud, resulting in costs of about $70 billion. Goodman told me that seniors, in particular, are frequent targets of health insurance fraud, especially Medicare schemes. Yet if this happens to you, you likely won’t even know — until perhaps much later when something weird occurs, like you get a collection notice in the mail for treatment you didn’t have or you are turned down for a loan because your credit rating plummeted due to unpaid medical debts incurred in your name by an imposter. Messes like these can take years to unravel.
How to Avoid Getting Ripped Off
Goodman and I discussed what might be some red flags that someone has stolen, or is trying to steal, your medical identity…
- You are offered a “free” medical screening or equipment (such as a wheelchair, walker or diabetic supplies) — all you have to do is provide your Social Security number, Medicare information and/or health insurance policy number. Sometimes free medical offers are legitimate — for example, your community hospital may offer periodic free or discounted health screenings, such as mammograms or blood pressure tests. Be suspicious, however, of such offers at or near commercial settings such as shopping malls or health clubs — they may be “rolling lab” schemes in which scammers skip from mall to mall or gym to gym, administer tests (which may themselves be bogus), then bill them to your insurance or Medicare. And, as for that free wheelchair, why would a company simply give you medical equipment? Once an unscrupulous company has your signature, it can try to bill Medicare for equipment or services you do not need or do not receive.
- You (and/or your insurance company) are charged for services that were not provided. Crooked physicians involve themselves in schemes to obtain “reimbursement” for medical visits you never made or tests you never had. They assume that you won’t look closely at your statements and that if you do, you won’t know one treatment from another. You can protect yourself by keeping careful records of all medical appointments and procedures and comparing them with statements from your doctor and insurer. If you detect a discrepancy, immediately contact your insurance company to challenge it. Many companies offer ways to report suspected fraud on their Web sites.
Victim-Proof Yourself
Goodman gave advice on how to minimize the likelihood that you will become a victim of health insurance fraud…
- Request copies of your current medical files from all medical providers. You have a legal right to these documents under HIPAA (the Health Insurance Portability and Accountability Act of 1996). Carefully review them and correct any false or incorrect information.
- Be careful with your Social Security, Medicare and insurance policy information — these are the tools thieves use to steal medical identities. Though you can do little to keep them from gaining access by hacking into a company’s database or breaking into a doctor’s office, you should protect this information in every way you can. Shred all documents with these numbers so that they can’t get them from your trash.A common trick: Calling and requesting a policy number or other private information because it is necessary “in order to process a payment or claim.” If someone wants your Social Security number or other such information, always ask why. Sometimes there are legitimate reasons — for instance, perhaps a hospital requires this information to be paid for treating you. In that event, verify that it is a legitimate request by asking for the caller’s name — then you can call the hospital and ask to speak to that person. If you discover that there’s no such person, promptly report the incident to your insurance company (as you should with any suspected fraud).
- Never sign a blank insurance form. Fill out, sign and date only one claim form at a time. Giving blanket authorization to providers to bill for services can lead to overcharges and other abuses. Keep copies of all such forms.
- Don’t agree to let your health-care provider keep your credit card number on file. When you conduct medical transactions online — such as refilling prescriptions or purchasing contact lenses — Goodman advises minimizing data exposure by typing in your information each time you order. When you trust your credit/debit card data to these institutions, you are also trusting that they are safeguarding it adequately, and all too often that is not the case.
- Use care when disposing of confidential information since any private information can be used to get more. Shred ATM and credit card receipts and take security measures with stored paper documents, computers, iPods, PDAs, smart phones, computer printers and other electronic devices that can store personal data.
- Do not assume that all is well because you don’t owe money. Once every few months, make a point of sitting down to compare your medical bills with the Explanation of Benefits (EOB) statements from your insurer. Follow up on any discrepancies, such as services you did not get, office visits you did not make or medical equipment you did not use.
- Always scrutinize your monthly credit card statements, including health-care charges. Promptly report any unauthorized transactions to the issuer and any instance of suspected fraud to your insurer.
- Monitor your credit report. Request a free copy from each of the three nationwide consumer credit-reporting agencies at least once a year and review it for suspicious entries. If you detect any, challenge them. If necessary, file a police report. To get your report, go to http://www.annualcreditreport.comor call 877-322-8228.