Medical identity theft is one of the most dangerous forms of identity fraud, the consequences created for the victim are overwhelming and in many cases permanent. The health care system does not seem to have a hold on the battle against medical fraud, in most cases patient identity verification is not only inadequate but it’s downright criminal.

Patient information is traded daily on many online illegal sites and this is typically the work of identity theft rings and scammers who make a handsome living from stealing and trading personal information like credit card numbers, social security records and health care records. How do these medical identity theft scams occur? How can someone’s information leave the confines of a medical facility and end up for sale somewhere on the internet?

In many cases these are inside jobs, medical care employees may be tempted to capture and farm patient information with the intention of selling it to identity theft criminal groups or trade it themselves. The information is then used to create fraudulent medical billings. Medical identity theft involves more than just someone using your medical benefits as if they were you.

The scams that surround medical identity theft

Bogus treatment billing – with the aid of dishonest health care employees, medical identity thieves can bill your health care provider for fake or inflated treatments. In many cases the people responsible for these acts are not even criminal gangs or outside people, but doctors and their staff who understand exactly how the insurance billing system works and are very aware of the discrepancies of the security and verification process when rendering services and producing billing statements.

Purchasing of legal narcotics with your health benefits – whether a criminal group or medical staff initiates this, your health care benefits can be used to purchase prescription drugs to sell or often feed addictions. Any kind of controlled narcotic substance can be billed to your insurance company without you even suspecting.

Getting free medical treatment – people who do not have their own medical benefits can receive medical treatment under your policy if they possess the needed information. Again the identity verification process is poorly done by health care facilities and the law does not require them to be experts in this area. When this happens the victim’s life is endangered because someone else’s medical history is now being recorded onto theirs.

Additional steps to prevent medical identity theft?

In our introductory article on The Truth About Medical Identity Theft, we listed some basic steps for protecting against this crime, here are some additional steps that everyone should practice routinely.

One thing you can do on your own is to review your medical benefit statements often, if your health care provider does not automatically send you statements about your benefits and how they’re being used, then ask for a statement if not monthly, at the very least quarterly.

Any letter or notification you receive from your health insurance you should open and read immediately, it is here where they may be bringing to your attention the use of specific treatments for conditions you do not suffer from. If you are being notified of a treatment or service you did not receive, you must dispute immediately.

Always shred old medical statements and old insurance cards, if your insurance card has your social security number on it, make a copy of it cut out the last four digits of your social security number, this way you can always use the copy for reference and take the actual card with you only when you need it.

Check you credit report diligently and as you check for any discrepancies and invalid credit account, look for anything related to medical costs, this would be a sign that your name has been used for medical services somewhere.

When you receive letters or bills from health care providers, doctor’s offices or other medical institutions, do not dismiss them as junk mail. These could be clues that your information has been used to start medical services.

If you do discover that your information has been used for the purpose of obtaining medical benefits illegally, you must report this to the credit bureaus and place fraud alerts on your credit files just as you would if your credit card number was being used.

Identity fraud and identity theft protection are an ongoing and ever changing task. In the case of medical fraud there aren’t many things that subscribers can do on their own to protect against it besides the tip mentioned above. What goes on within medical facilities and who has access to your information is in fact out of your hands so you must resort to a more sophisticated system of protection if you’re to avoid medical fraud.

Not every company that offers identity theft protection has medical identity theft prevention features available as well. This is more complicated task when it comes to identity theft and needs to be approached differently than credit and social security related thefts.

Companies that offer medical identity theft protection

Trusted ID is the only company we have found so far that specifically lists medical benefits protection as part of their identity theft protection system called ID-Freeze. This company can help you review your medical benefit statements to ensure that you and your family are the only ones being treated with your medical benefits. It can simplify the task if you use your medical benefits often.

More companies will be listed here if they truly cover you for medical benefits in the future.

Medical identity theft and health care fraud are serious crimes in the U.S. Much like getting your credit card number or name and address taken and used by someone else for their own benefit, having your “medical identity” stolen an abused has the same consequences in terms of financial burdens but it is a lot more serious in terms of your medical record being altered with someone else’s information.

Medical identity theft happens when someone uses your personal information to get money, prescription drugs, and medical care in your name. This type of identity theft creates a lot more than financial hardship, it changes your medical history and enters new diagnosis records and prescriptions that could end up endangering your own life.

Medicare fraud is basically the same thing, however this applies to medical benefits afforded to individuals by the federal or state governments and this can also have the same consequences in that if Medicare realizes that you have been using these benefits when you do not yet qualify for them you could be held liable. All a thief needs is your social security number to apply for these benefits.

Medical fraud can be committed by anyone who can’t otherwise afford to pay for any medical attention. The law does not require medical facilities or their personnel to be experts at verifying information that is rendered before they extend medical services, in most cases no verification process is in place to make sure that the person getting medical care is in fact who they say they are.

One of the reasons why your medical identity ends up in the wrong hands is because medical clinics and facilities do not really have strict security measures in place to protect your personal information. Medical insurance fraud is often the work of criminal rings that dupe or bribe clerks into volunteering this information, which is now in electronic form and much easier to transfer.

Why medical fraud is lucrative

The criminal rings that farm this information sell it for a profit, these types of operations make credit card fraud look like shoplifting candy. These are multi million dollar operations that cater to ex-cons, undocumented workers, and anyone who’s willing to pay for the information that can afford them medical care. Your information may also be traded via online financial black markets.

The consequences of health care fraud and abuse

To begin with, you could end up being canceled or suspended by your health insurance carrier once they detect that your account is at risk of fraud. Your diagnosis records change permanently and in most cases it is basically impossible to correct the entries, and this can pose a serious danger to your life if you’re given the wrong diagnosis when you seek treatment. You could also end up with a medical bill for which you never actually received treatment but are expected to pay in full. This would typically happen if your health insurance does not cover the treatment that the thief got or if your benefits were exhausted in the process.

How to protect against medical identity theft

• Only share your health insurance information with trusted sources.
• Be aware that phishing scams may also target you for your medical insurance information.
• Monitor and read your explanation of benefits from your health care provider and get quarterly summaries from your carrier that describe all the benefits you have used so far and detect any discrepancies.
• Keep copies of your medical records in case you need to prove something in a dispute.
• Check your credit report often, if there are any medical leans against you, they would be recorded there.

Your medical records are in many different places especially if you’re older and have a long medical history. So it would be very impractical to try and monitor each of the sources that have your information especially if you have had several health insurance carriers throughout your life. There are only a handful of identity theft prevention services that can monitor your health insurance benefits and protect your identity from medical identity theft, Trusted ID is one of them. Outside of outsourcing and automating the process through identity theft protection services, there isn’t much on the individual level that you can do to make sure your medical information remains filed safely.

The point of employing these services is so that the responsibility of monitoring and verification of your information is passed to an entity that is technologically equipped to detect and stop unauthorized medical transactions from taking place in your name. Fraud prevention services have evolved quickly bringing forth a lot of great security features due to the dire need to monitor medical records and prevent health care fraud and abuse from occurring to hard working individuals.