Both payers and providers are considered a top target for medical identity fraud following the healthcare industry’s shift toward electronic health records (EHRs), but better identity verification and a layered approach to fraud detection can help mitigate a rapidly growing threat.
Acknowledging there is “no silver bullet” to prevent fraud tied to medical identity theft, a new report released by the Medical Identity Fraud Alliance (MIFA) says a layered approach to fraud management that includes identity verification and data breach prevention tools can help healthcare organizations limit the often-devastating consequences associated with medical identity theft. Additionally, providing patients with more tools to take charge of protecting their identity can help health plans quickly identify suspicious activity that leads to fraudulent claims.
The paper urges healthcare organizations to move away from the “pay and chase” mentality of fraud enforcement and take additional steps to verify patient identities through online registration portals and third-party identity authenticators. Although medical loss ratio requirements limit spending on fraud programs, health plans should prioritize identity theft protections as cyber threats continue to evolve.
Last year, Anthem reported the largest hack to date, which compromised health information for 80 million customers.
“MIFA's paper provides critical information on steps the healthcare industry can take to effectively counteract the criminal efforts of identity fraudsters,” Donald Rebovich, Ph.D., executive director of the Center for Identity Management and Information Protection at Utica College, said in an emailed announcement. “By carefully assessing the challenges of protecting digital medical identities and furnishing recommendations for proactively preventing and responding to medical identity fraud, MIFA has provided an indispensable tool toward neutralizing the ever-changing arsenal of deceptive actions employed by the 'new age' medical identity fraudster.”
A survey published by MIFA last year found that more than 2 million Americans fell victim to medical identity theft in 2014, representing a 22 percent annual increase. A subsequent survey found that more than 45 percent of healthcare organizations were spending more on medical identity fraud prevention. Some have said new biometrics technology could improve patient identification and limit the potential for identity theft.
Meanwhile, legislators have pushed the Department of Health and Human Services to do more to prevent breaches that lead to identity theft targeting Medicare beneficiaries.