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Nobody wants to get a $4,000 medical bill; especially if they haven’t been in a hospital for years.  But it can happen to anyone.  According to a recent survey by the Ponemon Institute, it has already happened to 5.8% adults in America. They have been a victim of medical identity theft, which costs an average of $20,160 per case.  While this has serious financial implications, the human cost is even higher.

Patients whose medical identities are stolen face serious drawn out effects. Fraudulent health care events can leave erroneous data in medical records. This flawed information, such as information about tests, diagnoses and procedures, can greatly affect future health care and insurance coverage.

Patients are often unaware of medical identity theft until a medical bill or a collection notice exposes the problem. Then, the burden of proof is with the patient and it is difficult to get the patient’s legitimate medical records cleaned up. The consequences can be life-threatening and can lead to serious medical treatment errors and fatalities.

Everyone is at risk; personal information is spread all over the globe.  US health insurance companies hire subcontractors in other countries to provide customer service, data processing and many other functions. But even within the border of our nation,  we have all heard or read of stories about stolen government laptops, and lost backup tapes. Last year CVS, the pharmacy giant, was fined $2.25 million for failing to protect sensitive financial and medical information of its customers and employees.

More recently, 12,000 Medicare enrollees had their protected health information compromised by a simple filing cabinet donation gone wrong.  Blue Cross & Blue Shield of Rhode Island donated a filing cabinet to a non-profit organization without first removing surveys that contained Medicare PHI (Protected Health Information).

While all these stories are awful, I believe the real danger still lies with individuals who work for doctors, clinics and hospitals.  It is becoming alarmingly more common for clerical staff to steal patient records by downloading information on a flash drive and sell it on a black market, which can happen in a mere moment.  This could be an unhappy employee or someone recently hired to take a position simply to purloin information.

Medical administrative staffs who commit medical identity theft are sophisticated professionals who are adept at making sure victims do not detect their crime. Victims may only discover it many years later through an unhappy circumstance such as the discovery of an incorrect blood type on a medical chart, or the loss of a job opportunity after a background check reveals one or more diagnoses and diseases that didn’t belong to them.

Medical identity theft victims do not have an easy way to discover who, if anyone, to call for help. Because of how this crime is committed, in some situations, the same people victims may call for help may be among those perpetrating the crime.

A physician can be the victim of identity theft in his professional capacity. This type of identity theft is often the starting point for disseminating incorrect information about patients, and it is often seen when professional crime rings are involved. Thieves steal a physician’s name, license number, forge a signature, falsify patient records, and forge prescriptions.

As the health care system transitions from paper-based to electronic record keeping, this crime will become easier to commit. Victims will find it more difficult to recover from medical identity theft as falsified medical records are disseminated and re-disseminated through computer networks.

Electronic medical records on the nationwide level will have to be assessed for medical identity theft. Given the insider nature of this crime, any digitization of medical files in electronic health records needs to be built with an understanding that some doctors, nurses, clinics, and hospitals, as well as their administrative staffs, may be thieves themselves. This poses significant security problems, but if these issues are not taken into account now, then electronic systems can become a means to potentially enable medical errors across the county and facilitate widespread medical identity theft.

Currently, the thought is that digitization of patient records will improve health care, reduce fraud, reduce medical errors, and save lives. But this does not account for the challenging reality of medical identity theft and the substantial problems it can introduce into such a system.

The Federal Trade Commission (FTC), which has studied financial identity theft, is not responsible for addressing medical issues. Medical identity theft falls to the Department of Health and Human Services (HHS), which has not focused on medical identity crimes.  The Office of Inspector General (OIG) investigates cases of generalized health care fraud and abuse, which is concentrated on financial damage to the Medicare program.

The Fair Credit Reporting Act allows for recourse for victims of financial identity theft. In the medical arena the Health Information Portability and Accountability Act (HIPAA) allows free information exchange between the provider and insurance communities. Patients have to give up most of their rights in exchange for insurance payment.

The Office of Civil Rights at the Department of Health and Human Services should review the HIPAA privacy rule and propose changes to expand the rights of medical identity theft victims, allowing them to amend health records in a much easier way.

One of the most effective means of proactively discovering improper use of personal information is to review all claims paid by the insurance company for each family member. Health insurers should send each beneficiary a free annual listing of all claims that were paid and to whom. This option is available on their secure website. Unfortunately, the information can be incomplete.