Senators Unhappy With HHS Answers on Medical Identity Theft

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By Alex Ruoff

Feb. 1 — The Obama administration doesn't have a clear strategy for combating medical identity theft, a Senate HELP Committee staffer said Feb. 1.

Members of the Senate Health, Education, Labor and Pensions (HELP) Committee who aren't satisfied with the HHS's plan for helping victims of medical identity theft are mulling ways to improve federal fraud-fighting efforts, an aide for the committee's Republican majority told Bloomberg BNA in an e-mail.

The issue could reignite debate over a provision in the Affordable Care Act that capped health-care organizations' spending on fraud prevention, an official with a national nonprofit that works to reduce medical identity theft told Bloomberg BNA Feb. 2.

“The government has a role to play in incentivizing private industry to do the right things,” Ann Patterson, senior vice president and program director for the Medical Identity Fraud Alliance, said.

The Department of Health and Human Services explained its efforts to combat medical identity theft in a Jan. 20 letter to the Senate HELP Committee.

The letter was in response to a request by Senate HELP Committee and Finance Committee leaders in November for information about how the federal government is working to curb the rise in medical identity theft.

Medical Loss Ratio

Patterson told Bloomberg BNA she's met with Senate lawmakers to discuss how the HHS could better reduce instances of medical identity theft. She said health plans have been forced to limit spending on fraud prevention in recent years due to the ACA's medical loss ratio requirements.

Health plans have been forced to limit spending on fraud prevention in recent years due to the ACA's medical loss ratio requirements, Medical Identify Fraud Alliance's Ann Patterson said.

The ACA requires insurers to submit data to the HHS on the proportion of premium revenues they spend on clinical services and quality improvement compared with other spending such as administrative overhead, which includes fraud prevention programs.

The ACA requires insurers to spend at least 80 percent of the money they receive from premiums on clinical care.

However, Patterson said fraud can interfere with clinical care, causing misdiagnoses and delays in care, and therefore should be considered a contribution to clinical care under medical loss ratio requirements.

Patterson said the HHS could also be doing a better job of educating Americans on how to prevent their health information from being stolen in the first place. She said the HHS should also better coordinator information sharing about cyberthreats and fraud issues among health-care organizations.

“This isn't just a private sector problem because identity fraud is flowing through the Medicare and Medicaid systems as well,” Patterson said.

HHS Response

The HHS Office for Civil Rights and the Centers for Medicare & Medicaid Services work closely with federal and private sector organizations to share cybersecurity threat information and combat fraud, the heads of the agencies said in their letter to Senate lawmakers.

The CMS works with law enforcement to determine if any Medicare or Medicaid beneficiaries' identities have been stolen, the letter said.

The agency also offers materials about medical identity fraud on its website.

To contact the reporter on this story: Alex Ruoff in Washington at aruoff@bna.com

To contact the editor responsible for this story: Kendra Casey Plank at kcasey@bna.com