Medicare Fraud: Is Your Personal Health Information at Risk?

What happens when malicious individuals get ahold of your Medicare information?  They sell it and make a bundle – in fact, your medical information is worth 10 times more than your credit card number on the black market. Medicare fraud perpetrators collect a treasure trove of personal data including names, birth dates, policy numbers, and diagnosis and billing information.  Then they turn around and swipe IDs to buy medical equipment and pharmaceuticals that can be resold.

When your credit card is stolen, you know it right away because either your bank alerts you, you discover your card is missing, or mysterious charges show up on your statement.  By contrast, when a fraud perpetrator captures your Medicare number in concert with your personal information, they can milk it for an extended period of time without detection because you’re unlikely to discover that anything is amiss until Medicare discovers the fraudulent activity and contacts you to investigate.

Medicare scams are proliferating because they’re so profitable, and they’re profitable because they take so long to detect. In fact, Medicare scams are so well shrouded and prolific that experts can only estimate losses – and it’s widely believed that fraudulent activity accounts for anywhere between 3-10% of total payouts.

Despite HIPAA requirements around privacy protection for personal health information, many providers are placing data security concerns on the back burner. And then these providers send medical records and billing information via email believing that the chance of breach is low and that the risks associated with unsecured email are minimal. The risks, however, are real.

Electronic health records are rapidly becoming standard in the industry because they directly contribute to both improved patient care and more efficient operations. However, secure document delivery protocols between physicians, insurance carriers and patients haven’t yet caught up.

While patients unquestionably benefit from integrated care and open communication between the providers treating them, they’re put at significant risk when this communication occurs over unsecure email. It’s not just about the exposure of private information – it’s about identity theft.

From a fraud perpetrator’s point of view, Medicare is a ripe and easy target for two reasons.  First, it’s easy to infiltrate – if providers aren’t on top of data security generally and secure document delivery specifically, it’s a disconcertingly simple exercise for hackers to get their hands of private patient medical records and billing statements. Second, it’s easy to fly under the radar and avoid detection for a lengthy period of time – and the longer the window is open, the more profitable the fraudulent activity becomes.

This is why is so critically important for providers to put secure document delivery measures in place. When patient records are transmitted digitally between care providers, insurance carriers and patients, the risk of breach on an individual level seems small.  However, hackers will increasingly prey on the health care industry because it’s so profitable and easy to infiltrate.

Funded by our tax dollars, when Medicare gets fleeced we all lose, With the FBI and Government Accounting Office agreeing that the fraud rate is between 3 and 10% – and that the government is spending in excess of $2.5 trillion on health care – we’re looking at lost tax dollars in the range of $75-250 billion annually – ouch.

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