Medical identity theft is a growing concern for healthcare providers and businesses of all sizes. Unfortunately, as technology advances, so do the methods used by bad actors to steal personal information. This not only poses a risk to individuals but also to the businesses that collect this information. In this post, we’ll take a look at the issue of medical identity theft, its impact on businesses, and the steps that can be taken to prevent it.
Understanding Medical Identity Theft
Medical identity theft occurs when a criminal uses someone else’s personal information, such as their name, Social Security Number, or insurance information, to receive medical treatment or to file false insurance claims. This type of identity theft is particularly concerning because it can go undetected for long periods. In many cases, the victim may not even be aware that their information has been compromised until they receive a bill for medical services they didn’t receive or are denied coverage for a legitimate claim. In extreme cases, the fraud can continue for years.
Identity theft is constantly evolving, and new methods are constantly being developed. One of the recent types of fraud is synthetic identity fraud. This is a type of identity theft where the thief combines real and fake information to create a new identity. For example, they may use a real Social Security number, combined with a fake name and address, to open bank accounts, credit cards, and other accounts. Just last year, a man from Georgia was investigated by Homeland Security Investigations (HSI) and sentenced to seven years in federal prison for his role in a synthetic identity scheme that cost banks nearly $2 million.
The Impact on Businesses
The consequences of medical identity theft can be severe for businesses. One major impact is financial losses due to fraudulent claims. When a bad actor uses someone else’s insurance information to receive medical treatment or file false claims, the cost of those treatments or claims is passed on to the insurance company and, ultimately, to the business that is paying for the insurance, leading to increased premiums and other financial losses.
Another impact is the damage to a business’s reputation caused by security breaches. If a business’s systems are hacked, and personal information is stolen, it can lead to negative publicity and loss of trust from customers and partners. Businesses that fail to comply with regulations of protecting personal information can face legal repercussions, such as fines and penalties.
The good news is that there are several steps that businesses can take to prevent medical identity theft. Here are a few strategies to consider:
Method 1: Implement Strong Security Measures
Secure your systems and business processes. This includes encrypting sensitive information, implementing multi-factor authentication, and regularly updating software and systems. By taking these steps, businesses can make it much more difficult for thieves to access personal information.
Method 2: Train Employees on Best Practices
Educate employees on how to identify and prevent phishing scams. These scams often involve criminals sending emails or making phone calls that appear to be from a legitimate source, such as a bank or insurance company, to trick employees into providing personal information. By training employees to spot these scams and handle sensitive data, businesses can significantly reduce the risk of a security breach.
Method 3: Regularly Monitor for Fraud
Businesses should also regularly monitor for suspicious activity, such as unauthorized insurance claims or questionable changes to personal information. By doing so, they can quickly detect and address any fraudulent activity, minimizing the potential damage. These routine visual and data checks help businesses regularly monitor and promptly detect and address fraudulent activities, ensuring maximum security and minimizing the risk of fraud.
Method 4: Implement Identity Verification Solution
Finally, a digital identity verification (IDV) solution is essential in preventing medical theft. IDV verifies the identity of the patient ordering a prescription or booking an appointment for medical treatment. But that’s just the tip of the iceberg! Leveraging computer vision technology, medical providers can verify patients using biometrics along with machine learning and data checks elevating data security to a new level. IDV technology reduces medical theft, and helps healthcare organizations comply with regulations and avoid costly penalties and reputational damage.
Medical identity theft is a serious issue that can have severe consequences to the healthcare industry. By understanding how it occurs and taking proactive steps to prevent it, healthcare providers can protect themselves from financial losses, reputational damage, and legal repercussions by implementing strong security measures, training employees on best practices, and implementing IDV solutions like Vouched.
Contact us and learn how easy Vouched is to implement and help you stop medical ID fraud today.
Sharon Shi, the Product Marketing Lead at Vouched, leverages her rich experiences at Twitter and ad agencies to thrive in the dynamic field of identity verification marketing. Playing a key role, she collaboratively shapes Vouched's market positioning and growth.