When your wallet is lost or stolen, the first thing you probably do is call your credit card companies. You should also notify your medical insurance provider judging from the conclusions of a report to be released on Wednesday that finds that medical identity fraud can be very costly.
With identity fraud, most people think of criminals stealing Social Security numbers and credit card data to take out loans or make purchases that the victim is responsible for. But there is a growing amount of medical-related identity theft in which someone uses another person's identity or insurance information to get medical treatment or medicine. Medical identity theft typically involves stolen insurance card information, or costs related to medical care and equipment given to others using the victim's name. Roughly 5.8% of American adults have been victimized, according to a new survey from The Ponemon Institute. The cost per victim, on average, is $20,160.
"The National Study on Medical Identity Theft" is based on findings from 156,000 people who agreed to discuss identity theft in general. Among those surveyed, 5.8% provided specific details about how they had been hit by medical ID theft, in particular. Extrapolating to the general U.S. population, that means an estimated 1.42 million adults in this country may have experienced some type of fraud involving theft of their medical identification information, the report claims. About 9 percent of U.S. adults have been victims of identity fraud and, of those, nearly 6 percent are estimated to have been victims of medical-related identity fraud, which translates to 1.4 million people, according to survey results and population extrapolations from the National Study on Medical Identity Theft report from the Ponemon Institute. The report was sponsored by credit reporting firm Experian.
Medical ID theft is when "someone uses someone else's insurance information to get services or goods," says Jennifer Leuer, general manager at the ProtectMyID business unit at Experian, which sponsored the survey to get a sense of how big medical ID theft is in the United States. The fallout of medical ID fraud is that the victim is forced to sort out what happened with doctors, hospitals, insurance companies, credit agencies and sometimes even lenders that may have granted a loan for medical reasons.
According to the survey, 29% of victims of medical ID theft discovered the problem a year after the incident, and 21% said it took two or more years to learn about it. The average cost of sorting out the mess was $20,160, which might include making out-of-pocket payments to a health plan provider to restore coverage. Nearly half of the victims (48%) lost coverage due to medical ID theft. Roughly 75% found resolution difficult, and only about 25% said there were no consequences due to the theft.
Among the victims surveyed, 46% did not report the incident to law enforcement or other legal authorities, according to the report, and 33% said the medical ID theft occurred because a family member used their medical ID for goods and services without their knowledge. Other medical ID thefts were attributed to a lost wallet with insurance card in it, and a data breach that exposed patient information.
Leuer says individuals should always take the step to notify law enforcement about a suspected medical ID incident.
The average total cost to resolve an identity theft-related incident, according to the survey, came to about $20,000. More than half of the victims said they had to pay for the care they didn't receive out of their own pocket to restore coverage. Nearly half said they lost their health care coverage as a result of the incident, while nearly one-third said their insurance premiums went up after the event.
"We had a customer call this week who said he received a collections notice," said Jennifer Leur, general manager of Experian's ProtectMyID.com service. "Someone took a loan out from a bank to pay for several thousand dollars worth of surgery, used his name for the loan and the surgery... We got it removed from his credit file, but it changed his medical records and now he could face a lawsuit from the doctor who wants to get paid."
Fewer than 10 percent of survey respondents said that the matter affecting them was completely resolved and their identity restored, while 40 percent said they were not able to resolve the matter.
In many cases, the fraud is committed by a family member or friend of the victim, so the crime is often not reported to authorities, said Larry Ponemon, founder and chairman of the Ponemon Institute.
But don't doctor's offices and hospitals ask to see photo ID?
"That is not as common a practice as you might think," Ponemon said. "Some health care providers think that could be a violation of the consumer's privacy."
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