The double-edged sword of e-signatures

Greater use of electronic signatures can make it easier for payers to do business, according to an Insurance Thought Leadership article, but this technology also brings efficiency gains to would-be criminals. So the same tool can be a boon or a bane depending on the intent of its users.

Agents and brokers can streamline getting an insurance application signed if they are the ones who collect e-signatures from customers, suggested the article. This eliminates the need to print paper applications, sign them in pen and return them either electronically or through the U.S. postal service.

"When you add up the time savings and multiply that by the number of documents sent daily that require a signature, significant productivity and expense reduction can be achieved," ITL noted.

Moreover, the federal Electronic Signatures in Global and National Commerce Act of 2000 made electronic signatures as legally valid as penned ones in terms of interstate commerce. And state laws nationwide increasingly support the validity of electronic contracting, the article stated.

But a recent fraud scheme shows how criminals may capitalize on the identity security risks of e-signatures. The owners of two New Jersey medical testing labs reportedly copied physicians' electronic signatures onto diagnostic test reports, reported. The companies were supposed to send test results to doctors to read them and create reports of findings for patient care and Medicare billing purposes.

But many tests for which these companies claimed payment never reached the doctors, authorities allege. Instead, the owners interpreted tests for two years and electronically copied physicians' signatures onto phony reports of test results, according to the complaint.

After authorities received tips on the scam from current and former employees, the owners were charged with conspiracy to commit healthcare fraud. They face up to 10 years in prison and a $250,000 fine.

For more:
- here's the Insurance Thought Leadership article
- read the article

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