How to Prevent Medical-Identity Theft

This increasingly common crime can wreak havoc on your credit and even compromise your health care. Here’s how to protect yourself.

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You open the mail to find a massive bill for laser eye surgery—but you’ve never gone under the beam. Welcome to the diabolical world of medical-identity theft. As with traditional identity theft, a thief nabs your personal information to go on a spending spree. But instead of stealing your credit-card digits to buy, say, a designer wardrobe, the perpetrator gets hold of your health-insurance info and uses it to obtain medical goods or services. An estimated 1.85 million people fell prey to such theft in the United States last year, up 30 percent from 2010, according to the Ponemon Institute, a data-protection research group.

How Could Someone Steal my Medical Identity?

It’s easier than you think. Often all a thief needs to obtain treatment in your name is your health-insurance–member number (or, for Medicare members, a Social Security number), says Lisa Schifferle, an attorney for the U.S. Federal Trade Commission. Criminals can get their hands on account numbers in several ways. Old-fashioned wallet-stealing is one. Modern methods include breaking into files or computer systems at a hospital or a clinic and secretly snapping cell-phone shots of forms filled out by patients in a waiting room. Your account information can then be used for a variety of scams, ranging from small to large. For instance, a fraudster might use your info to obtain prescription drugs that he’s not entitled to. Or, in a more elaborate scheme, he might buy medical equipment, like a wheelchair, and sell it for cash.

Most of the time, people find out that they’ve become victims via a suspicious bill, a call from a debt collector, or a sudden alert that their medical benefits have maxed out. However, cautions Schifferle, that’s not the worst-case scenario. What is? “When you find out because you’ve gotten improper medical treatment,” she says. This can happen when a victim’s personal medical history (blood type, allergies, medications) becomes intertwined with that of the criminal.

How Do I Prevent the Crime?

Experts suggest that you take the following steps: If you lose your insurance card, contact your insurer immediately and follow the company’s protocol for dealing with identity theft, says Eva Velasquez, the president of the Identity Theft Resource Center, a national nonprofit victim-assistance group. Don’t give any account information to unverified sources, especially unsolicited telephone callers, says Schifferle. (Lately, many scammers claim to be calling about the Affordable Care Act or Medicare, she says.) If a form at your doctor’s office requires your Social Security number, ask if it’s necessary. “A lot of places that request it don’t really need it,” says Schifferle. Check your credit reports at annualcreditreport.com for free once a year, says Velasquez. And be sure to read the explanation-of-benefits (EOB) statement that your insurer sends after each treatment. This vigilance could save you a major headache (or worse) later on.

Uh-Oh, This has Already Happened to Me. Now What?

There is no quick remedy for medical-identity theft. Experts recommend that you immediately file a police report and contact your health insurer. Then call all the health-care providers where you have received care—or where the perpetrator has received care in your name—and request your medical records. (Learn how to do so at consumer.ftc.gov.) According to Schifferle, it’s best not to mention your suspicions of identity theft to the providers, because you could have trouble getting the records. Just request your medical history (which providers are required by law to produce), then work with your provider and your insurer to correct any fraudulent information. It’s also a good idea to place a fraud alert on your credit report. (Go to annualcreditreport.com for instructions.) “This alerts creditors that you are a victim and makes it more difficult for someone to try to get credit in your name,” says Schifferle. You are not responsible for fraudulent medical charges, says Paul Stephens, the director of policy and advocacy at the Privacy Rights Clearinghouse, a California-based nonprofit consumer-advocacy group. However, he says, “your credit may be temporarily damaged until you clear everything up.” Ouch, indeed.