Protecting against Healthcare Fraud: Lessons Learned from the Financial Industry

We all have routines: get up, brush our teeth, eat breakfast, and exercise. As consumers, we also have fairly set spending patterns. Visa was among the first credit card issuers to develop a system for tracking those patterns—and noticing deviations in them—as a way to detect potential fraud.

With this system, Visa set a precedent for protecting consumers against financial loss due to fraud. I had the privilege of working at the company during this time, learning valuable lessons along the way—lessons that can apply to fighting healthcare fraud and medical identity theft.

Lesson 1: Consumers Are Their Own Best Protectors

Chances are you’ve received a call from your credit card issuer about a suspicious card purchase. These calls—alerts, really—occur because the fraud tracking system detected a change in your normal spending patterns.

When you get such a call, what’s the first thing you do?

Contact your financial services company, of course, so they can resolve the problem. In this way, consumers become the first line of defense against financial fraud and identity theft. Consumers, in fact, have been instrumental in driving down fraud costs, not only for themselves, but also for the industry as a whole.

Consumer-driven defense is an excellent model for the healthcare industry to follow. Members of health plans should have the right to exercise the same level of control over their medical identity as consumers do over their financial identity. Doing so will protect them against the health risks that arise from medical identity theft and healthcare fraud.

Lesson 2: No “Acceptable” Level of Fraud Loss in Healthcare

For credit card issuers, there is a level of acceptable financial loss due to fraud. There has to be. At some point, it becomes more expensive to try and eradicate fraud altogether than it is to bear the cost of some fraud.

But with healthcare fraud and medical identity theft, the results can be much worse. As with credit card fraud there is financial loss, but there are also reputational and medical repercussions. Imagine the embarrassment and legal liability if someone’s psychiatric records were exposed, or consider the misdiagnosis or mistreatment that arises from mixed-up medical records. People get sick, and they even die. It’s happened.

So the question is, how do you put a price on a human life or their health? In other words, what is the acceptable level of loss due to healthcare fraud or medical identity theft?

The answer, of course, is zero.

MIDAS—Healthcare’s Solution to Fraud Loss

If consumers are their own best protectors, and if there is no acceptable loss due to healthcare fraud, then it logically follows that patients have the right to take charge of their medical identity.

ID Experts’ MIDAS—Medical Identity Alert System—is a good solution. Its alert-driven system lets members stop fraud in its tracks, similar to the successful method that Visa launched years ago. This proactive approach can help reduce the level of fraud and medical identity theft, reducing the risk to our financial, reputational, and medical health.

Given the rising costs of healthcare due to fraud, everybody, including patients, needs to step in and fight. MIDAS may be the weapon we all need.