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Medical Identity Theft: Are You at Risk?

In its various incarnations, identity theft can be one of them most damaging and frustrating crimes for its victims. But new research suggests that one of the most dangerous kinds of identity theft - medical identity theft - has yet to attract the attention of policymakers and potential victims. Here, an outline of how to protect yourself against medical ID theft - and why it's important to do so.

The Risks of Medical Identity Theft

While identity theft can cause financial distress (and has even been documented as pushing victims to file bankruptcy), its harm remains largely in the economic sector of most victims' lives. Victims of financial identity theft may experience damaged credit reports, see their bank accounts drained or find themselves charged for purchases they never made.

Such occurrences can be frustrating, but they aren't life-threatening. Medical identity theft, on the other hand, can literally be deadly.

The Basics of Medical Identity Theft

• Medical identity theft occurs when someone obtains medical goods/services or makes false claims for medical goods/services by using someone else's personal information (such as medical insurance information, Social Security Number, etc.) without his/her permission.
• According to the World Privacy Forum, nearly a quarter of a million Americans, or 3% of all ID theft victims, was victimized by medical identity theft in 2005.
• The World Privacy Forum notes that medical identity theft is the least-studied and worst-documented kind of ID theft and has dubbed this crime "the information crime that can kill you."

Why is Medical Identity Theft so Dangerous?

Imagine this: someone you don't know uses your insurance information to visit the doctor. That person gets treated for a couple diseases, has his blood drawn and signs up for an expensive surgical procedure or two. The doctor enters all this in your medical file and sends the bills to the address listed on the account. Here's how this could affect you down the line:

• You'll get bills for procedures you never had done. In all likelihood, you'll be able to explain the problem to your insurance provider and have the costs canceled.
• Your medical record may have been altered to include diseases you never had. Down the line, this could cause you to fail a physical exam for a new job.
• Your blood type may be incorrectly recorded. If you need a transfusion and your doctor has the wrong information in your file because of medical ID theft, that's bad news for you.
• Your medical allergies may be incorrect. The ID thief could have noted allergies or intolerances very different to your own. If you need emergency treatment, you could be in trouble.
• You may be stuck with the bill. If someone else uses your information for medical treatment, you may be billed. Taking on medical debt can be a serious financial burden, especially if you already have a lot of debt or are on the brink of filing bankruptcy.

As the medical industry moves away from paper files and toward digitized documentation, the speed with which misinformation can be spread and the ease with which sensitive information can be accessed has increased.

What may be more disturbing is that the WPF estimates that most medical identity theft goes unnoticed by medical professionals and victims. After all, without a suspicious-looking bill to tip off the victim, minor changes to a medical history may not be found until it's too late.

Preventing Medical ID Theft

So what can you do to prevent having your medical insurance depleted, receiving improper medical treatment, losing out on health or life insurance, failing physical exams and/or having a false record of diseases and treatments? To prevent medical identity theft, take the following precautions:

• Carefully examine the "explanation of benefits" sent to you by your health insurer. This document explains any services provided and the reimbursements for those services. Double check the insurer's records against your own - any disparities should raise a red flag. If your insurer doesn't automatically provide you with such a document, request one.
• If you have multiple health care providers, ask each for a list of benefits provided.
• Treat your health insurance card like a credit card: guard it closely and don't leave it lying around.
• When checking in at a hospital or doctor's office, make sure no one is listening in as you divulge your personal information.

If you suspect you've been victimized by medical identity theft, do the following:

• Contact the hospital, clinic or doctor that sent you an incorrect bill and describe the mistake.
• Contact your insurance company to report the error.
• File a police report detailing the incident.
• Take steps to correct any false information in your files.

Other Problems of Medical Identity Theft

Thanks to legislation like the Fair and Accurate Credit Transactions Act of 2003, we have weapons against regular identity theft: everyone is entitled to one free credit report from each of the big three credit reporting bureaus per year.

Because medical ID theft is one of the less-researched of information crimes, though, consumer protections are not yet in place. In some cases, victims of medical identity theft don't even have access to their medical files to determine whether or not the information in them is correct.

In its report on medical identity theft, the WPF recommends that consumers be given access to their medical files similar to their access to credit files. For a look at the WPF's complete list of suggested legislative reform to address the problem of medical identity theft, check out the World Privacy Forum's website.