MARSHALL, Mo. – Medical insurance identity theft is a twist on financial identity theft. Thieves steal your personal and health information and use it to get medical treatment, prescriptions and even surgical procedures.
If someone steals your medical insurance information, you may get bills for medical services you didn’t receive, collection agencies may pursue you for debt you don't owe, and insurers may refuse your legitimate claims because you’ve reached your benefit limit.
Medical identity theft can also be deadly. When someone else uses your medical insurance, incorrect information can end up in your medical files. Errors in your records about your blood type, allergies and health issues can put your life at risk when you seek medical care.
Some cases of medical identity theft are called “Robin Hood crimes.”
“There have been cases where people have loaned their medical insurance card to someone else and they've gone in and gotten medical care on that insurance card,” said Cynthia Crawford, family financial education specialist for University of Missouri Extension.
But lending out medical insurance to family and friends is only a small part of the problem. Phil Blank, a senior analyst with Javelin Strategy and Research, which conducts in-depth studies of fraud, risk and security in financial services, said 8 percent of data breach victims in the United States had their medical information stolen in 2010. Medical records were the fifth most commonly stolen data.
There are mechanisms in place that allow for swift response to stolen financial information, but medical records are subject to privacy regulations that make tracking down fraud difficult once that privacy is breached.
“Let’s say you discover an entry for gall bladder surgery on your medical statement,” Blank said. “You call the hospital and ask for the details of this gall bladder surgery. If the name of the surgery recipient is different from yours, HIPAA (Health Insurance Portability and Accountability Act) prevents the hospital from sharing that information.”
“You've got to convince service providers and collection agencies that the bills are fraudulent and that you are not the person who should be paying them,” Crawford said. “It can damage your credit report. And a lousy credit report can cost a person up to a quarter of a million dollars.”
Health care providers are attempting to respond to this growing problem. Statements are sent out to insurance holders on every medical procedure performed, even if they’re not being billed for it.
Crawford says it is everyone's responsibility to look at all of their statements, line by line, to make sure they are only being charged for their own medical bills. “And if they are not, that is the time to get assertive about letting health care providers and your insurance company know that those are not your bills.”