What You Should Know About Medical Identity Theft

Joe Ryan thought it was a little odd when a newspaper clerk asked for his Social Security number. The clerk said he needed it "to verify his check for the ad" Ryan wanted to take out. A year later, Ryan received a medical bill for $40,000 for treatment at a Colorado hospital. But Ryan lives in Oregon, and was never treated for any condition in Colorado.

The medical bills were eventually traced back to that newspaper clerk, who has since passed away. The clerk had no health insurance and used Ryan’s SSN to get medical treatment for cancer. Now, Ryan is inextricably connected to that huge amount of medical debt. The hospital isn’t willing to just pick up the tab.

Medical identity theft can happen in many different ways, and can quickly destroy the credit ratings of its victims. Joe Ryan, for instance, was unable to refinance his business due to the damage done to his credit. He is also now faced with the task of untangling his identity from the medical charts that show the diagnosis and history of the newspaper clerk. 

Medical ID theft can be life-threatening

Lind Weaver was another medical identity theft victim who finally persuaded the hospital to drop a $4,000 medical bill that wasn't hers. But it wasn't until she went in for a hysterectomy a year later that she realized the crime still plagued her: Her medical chart contained the information of the identity thief (who happens to have diabetes and a different blood type than she does). "I now live in fear that if something ever happened to me, I could get the wrong kind of medical treatment," Weaver says.

Stealing medical information is easy

As paper files become a thing of the past, stealing medical information gets even easier. "Before, you couldn't steal a million paper files from a hospital," says Pam Dixon of the World Privacy Forum. "Now you can walk out with a million digital files on your iPod."

Identity thieves can also find Social Security numbers for sale on the internet starting at around $10. They then have a legitimate SSN to give the hospital when it asks for one. 

Filing false insurance claims

One type of medical identity theft involves filing false insurance claims. Scarily, medical theft crime rings exist in which healthcare workers and sometimes even doctors file false claims with insurance companies using your information. The insurance company pays out the claim, but the money goes into the crooked healthcare workers' pockets.

Find out if you're a victim

1. Get a copy of your credit report. There you'll see any medical bills that have gone to collections without your knowledge.
2. Check your medical records. This has dual-purpose: You can make sure they haven't been tampered with, and you should also safely store them in case they are tampered with in the future.
3. Ask your insurance company for a complete list of claims made in your name. You should recognize all of them, or follow up about any that you don't. 

The good news is that starting May 1st, medical facilities must begin complying with the Red Flags Rules, requiring any business that provides goods and services on credit to develop procedures that flag suspicious activity. This might mean training hospital staff to recognize fake IDs and calling in a supervisor if something seems fishy. Not bullet-proof procedures, to be sure, but a step in the right direction.

If you are a victim of medical ID theft, read the Identity Theft Resource Center’s useful consumer tips to recover from the crime.