U.S. Medical ID Theft Cost Jumps To $41 Billion

New Ponemon study finds that half of medical identity theft victims know the person who stole their IDs, and victims end up footing the bill in many cases

Dark Reading Staff, Dark Reading

July 11, 2012

2 Min Read

If you are the victim of medical identity theft, then chances are you will foot the bill for the fraudulent charges, a new survey finds.

The Ponemon Institute's Third Annual National Study on Medical Identity Theft, which was commissioned by by Experian's ProtectMyID, found that 45 percent of medical ID theft victims end up paying their health-care provider or insurer for charges incurred by the thieves because victims don't typically have any other recourse. Even worse, half of the victims say they know the person who victimized them, and 31 percent say they allow family members to use their IDs to get medical services.

"The survey findings show that medical identity theft is often a result of familial fraud," says Ken Chaplin, senior vice president of Experian's ProtectMyID. "This form of identity theft has been coined the 'Robin Hood Crime' because, in some cases, the victim willingly provided their medical credentials in an effort to help a family member or friend who is unable to financially afford medical assistance."

Chaplin says health-care providers and insurers must proactively institute medical ID theft policies that protect the victim from liability and charges, much like banks do for their customers. "For example, financial institutions limit consumers' liability for unauthorized use of their debit cards in most instances to $50 per card," Chaplin says. "That said, medical identity theft victims need to take action by filing a complaint or appeal to their healthcare provider or insurer" and get protection products or services, he says.

Some 2 million Americans fall victim to medical ID theft every year, according to the report, and it typically takes a victim about one year to resolve the fraudulent charges. One-fourth of the respondents say it took them more than two years.

The cost of medical ID theft per victim has risen from $20,663 in 2011 to $22,346 this year. The total cost jumped from $30.9 billion last year to a whopping $41 billion this year.

A bad sign in all of this: Nearly 60 percent of the survey respondents say they don't ever check their medical records for fraud.

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