Medical ID Theft a Large & Growing Problem

These days, consumers may pay a lot of attention to the ways in which they face potential problems related to identity theft, such as credit card fraud or someone gaining access to their personal information. However, experts say medical identity theft is just as big a problem.

Because more medical data is now being stored electronically as hospitals scramble to keep up with new federal requirements, there is a far greater risk that consumers will be exposed to data breaches and, consequently, the potential for medical identity theft, according to a new study from the Ponemon Institute. For instance, 94 percent of hospitals surveyed suffered at least a small data breach in the past two years, typically exposing medical files, billing information and insurance records.

If extrapolated out to the overall health care industry, the damages from these incidents could cost as much as $8.67 billion this year, and that number is up from the one seen in 2011, the report said. The average breach cost health care providers $1.2 million to remediate.

“Health care organizations face many challenges in their efforts to reduce data breaches,” said Larry Ponemon, chairman and founder, Ponemon Institute. “This is due in part to the recent explosion of employee-owned mobile devices in the workplace and the use of cloud computing services. In fact, many organizations admit they are not confident they can make certain these devices are secure and that patient data in the cloud is properly protected. Overall, most organizations surveyed say they have insufficient resources to prevent and detect data breaches.”

However, work is being done to improve medical data security, the report said. In the past year, 36 percent of health care organizations have tried to increase privacy and security of information, and 48 percent are conducting security risk assessments. Nonetheless, 73 percent of those polled said they simply don’t have enough resources to do a thorough job to both prevent and detect breaches, and 67 percent said the same with regard to medical identity theft. Identity Theft 911 founder Adam Levin says the problem can be larger than just losing your identity, it can be a threat to your life.

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“Medical identity theft is a highly misunderstood, under-appreciated and dangerous crime; and is growing geometrically,” he says. “While the motivation may be financial gain, the ramifications can often mean the difference between life and death as compromised medical files can potentially be co-mingled, causing a change in blood type or the erasure (or addition) of information regarding allergies (which can affect a diagnosis or treatment plan) as well as the exhaustion of one’s medical insurance.”

This type of fraud can affect consumers in more troubling ways than standard identity theft. In addition to a loss of funds or someone opening a line of credit in their name, a criminal can also use their insurance data to receive medical treatment, which can alter their records of their health histories and put them at greater risk down the road.

Image: Miss Chicken, via Flickr