GAO: Medicare smart cards would bring benefits, challenges

The use of electronically readable cards in Medicare could help with the administrative process, but would have a limited impact on eliminating fraud, according to a report publicly released April 24 by the Government Accountability Office.

Much of the success of using such technology would depend on how it compares to the costs and benefits of current paper card systems. Participation by providers would also be a boon or challenge to a new program, the report says.

The GAO looked at the functions of electronic cards, the benefits and limitations to using them and what steps the Centers for Medicare & Medicaid Services and providers would need to take to use the tools.

Some of the ways in which the cards could show promise include:

  • Authentication of beneficiary and provider presence at the point of care
  • Electronic exchange of beneficiary medical information
  • Electronic conveyance of beneficiary identity and insurance information to providers

However, the report's authors add that while some in support of the cards say that fraud reduction could be a benefit of the new system as well, that might not be true.

The federal government puts Social Security numbers on Medicare identification cards, which raises the odds of identity theft and fraudulent billing.

Still, electronic cards could have a limited impact in this area because "CMS officials stated that Medicare would continue to pay claims regardless of whether a card was used due to legitimate reasons why a card may not be present," the report says.

GAO adds that storing medical data on the cards in addition to electronic health record systems could lead to problems with ensuring information is synchronized and current.

To implement electronically readable cards would also be a time and resource consuming endeavor, the report's authors say. They evaluated the success of such programs in France and Germany, which proved a readable card system could be implemented, but only after many years of work.

To that end, Germany's deployment of smart cards also hit a snag when a review was called for to look into the security and confidentiality of the program in 2010.

To learn more:
- read the report (.pdf)

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