A young professional prepares to buy her first home and presents her mortgage application to the bank. She clearly qualifies for the loan but there is a problem. Her credit report shows over $9,000 in unpaid medical bills! The problem is that they are not her bills. This scenario is playing out more and more frequently as medical identity theft becomes a growing problem.
The FTC estimates that imposters using forged or stolen identity documents to secure medical care account for as much as 3% of identity theft in the U.S. – nearly 250,000 cases each year. And of course this problem affects all the victims of the crime including the doctors, hospitals, insurance companies and the individual.
The FTC has taken action to address the problem. And the impact on doctors can be substantial. A new regulation called the “Red Flags Rule” took effect this past August. Within the medical community, the new rule will require doctor’s offices and hospitals to establish protocols to identify the “red flags” of identity theft. Not only must doctors implement procedures, such as checking photo ID’s, checking for medical record inconsistencies and monitoring fraud alerts from consumer agencies, but they must also detail what they will do if they spot a potential problem.
This unfunded mandate requires “creditors” to implement these new protocols. In the language of the statute creditors are defined as businesses that regularly extend or renew credit. This would include any physician’s office or hospital that accepts insurance or offers a payment plan for services rendered. The AMA and numerous doctors groups argue that grouping physicians with auto dealers and utility companies are misguided and that doctors are not “creditors.”
Despite these protests, doctors can add another layer of paper work to an already overburdened process. As the healthcare debate moves forward, it becomes increasingly difficult to understand how the government can get its arms around a complex problem that hundreds of government agencies make more complex by the day.
