Picking our pockets surgically

Medical identity theft is the nation's fastest-growing form of health care fraud.

Medical identity theft is the nation’s fastest-growing form of health care fraud. The thieves going after medical identification numbers don’t want someone’s medical problems, of course, but there is gold in having data that permit insurance rip-offs and the filing of fake claims.

Securing medical identity is very difficult, according to health care experts, because unlike financial identity theft, there is no straightforward process for challenging false medical claims or correcting inaccurate medical records.

The experts say that there are several forms of medical identity theft, but most involve record theft by people working for health care facilities who then sell the information to organized-crime groups and others that fraudulently bill insurance companies.

Elaborate fraud rings using complicated schemes to maximize the use of stolen medical identity numbers have apparently become more commonplace.

Is this crazy or what? It is bad enough that the public feels insecure about finding a safe haven for their investments these days, but now we all have to worry about some sleazy character stealing our medical identity.

ALERT YOUR CLIENTS

As a trusted financial advisory professional, you need to make your clients aware of these scams, which can cost victims thousands of dollars in unpaid charges, a damaged credit history and, even worse, dangerous false details cluttering up medical records for years to come.

You can assist them by urging that they take a more active role in preventing health care fraud by carefully reading and reviewing their medical and insurance documents.

According to the latest statistics from the Federal Trade Commission, 3% of all identity theft victims in 2005 were victims of medical identity theft, which translates into about 250,000 people.

According to the World Privacy Forum, a public interest research group in Cardiff by the Sea, Calif., as many as 500,000 consumers had been victims of medical identity theft as of mid-2006, the latest figures that it has compiled.

It is easy to see why the problem is growing: Medical identity theft is a profitable business.

A WPF study found that while a stolen Social Security number brings about one buck on the street, a stolen medical identity number fetches about $50. (Come to think of it, this could be a new opportunity for Bernie Madoff now that the Ponzi scheme business has fallen on tough times.)

Identity theft in the health care world adds a layer of complexity because a thief can tap a person’s medical information to get care or make false claims, potentially altering the course of the victims’ future treatments if he or she doesn’t catch and reverse the damage, according to health care experts.

For example, a thief could have a different blood type or drug allergies, and a doctor, nurse or health care facility may not detect the mixed patient files before administering treatment based on the impostor’s medical history, not the victim’s history.

What’s more, victims may find that they hit their insurance caps, or become uninsurable or unemployable, based on medical problems that are someone else’s.

TIME-CONSUMING

A recent health care study found that 82% of medical identity theft victims discovered the problem only after they had been contacted by a collection agency or noticed money missing from their health accounts.

Fixing the mess can take a substantial amount of time. The study found that victims reported spending an average of 116 hours repairing damage to stolen health accounts.

In cases where accounts were created, the average correction time was 158 hours.

Spend some time with your clients now to alert them to this vicious scam. They will thank you for it.

Meanwhile, if any of your clients have questions about medical identity theft, direct them to worldprivacyforum.org.