States turn to smart cards to curb Medicaid fraud

States are exploring the use of smart cards to verify Medicaid recipients' identities and foil fraud, according to NJ.com opinion piece.

Smart cards are plastic, pocket-sized identifications embedded with integrated circuits. The cards also may store biometric data. They can prove an insured customer's presence and thwart illegal lending of membership cards to uninsured people for use at the point of healthcare service delivery.

Texas began using smart cards with fingerprints 10 years ago in its Medicaid program. While pilot programs required providers to use biometric scanners to read fingerprints, state officials later dropped this requirement. Similar smart card implementation decisions occurred in Louisiana and Georgia insurance programs, the article noted.

Indiana and Oklahoma have used Medicaid smart cards with magnetic stripes but are considering upgrading to cards with biometric data, the article noted.

Health insurance lags other industries in leveraging biometrics to fight fraud, and using biometric security measures on a large scale can be costly and raise privacy concerns, as FierceHealthPayer: Anti-Fraud reported.

North Carolina, for example, found the cost of biometrics prohibitive and is considering creating membership cards with hologram photos instead. Pennsylvania officials estimate the cost of a card with a magnetic stripe at 23 cents while photo identification cards cost about $8 apiece, the article stated.

Identity fraud made recent headlines when Florida insurance investigators raided a fruit company and found most employees carried some form of false identification, according to ABC-7 News. Investigators found identifications filched from 25 states.

This case came to light when an employee--after seeing a doctor for treatment of a work-related injury--admitted to his lawyer that he and his co-workers used false IDs, ABC reported.

"I am proud of our investigators for following a lead that will result in dozens of worker's compensation arrests and many arrests for identity theft that have been potentially devastating for victims," Florida Chief Financial Officer Jeff Atwater's office said in a statement.

For more:
- here's the NJ.com opinion piece
- read the ABC-7 News article

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