You arrive at the hospital for an X-ray, only to be told you have an outstanding balance for an emergency room visit. Or, you go to get a prescription filled and find out that you've maxed out your drug benefits. Only in both cases you weren't the one who used the service.
These are cases of health insurance fraud, a growing type of identity theft. According to an ABC.com news story, about 20,000 cases of health insurance identity fraud have been reported nationwide over the last 15 years.
If your insurance card is lost or stolen, it can be used illegally. In recent years, insurance identity fraud has become more sophisticated. A 2004 arrest made headlines when three people were charged with running a bogus insurance company, collecting premiums for services that were never provided. A May 11, 2004, story published at News-Medical.net reported the perpetrators allegedly left $30 million in unpaid insurance claims.
It's easy to be tricked into insurance identity fraud through spam e-mails or telemarketing phone calls offering extremely low rates for health insurance. If you refuse to sign up for insurance based on a phone call or e-mail, you won't be taken in by a scam artist who tries to sell you on their scheme. Always contact a reputable insurance agency yourself instead of responding to an incoming call or e-mail.
Sometimes health insurance agencies are victims of disgruntled employees. An October 10, 2007, report at ScienceDaily.com includes a warning about a scheme where fake medical records are created in an innocent patient's name, creating a trail of misleading information.
Imagine accidentally learning you're wrongly on record with a history of Viagra prescriptions or painkillers like Vicodin. You can prevent this type of fraud by carefully reading all health insurance statements and benefit explanations. If you see anything in these reports you don't recognize including payments, billing or descriptions of services you didn't receive, report it to your health insurance company's special investigations department.
The U.S. Department of Justice advises people to keep their medical records, insurance information and other paperwork in a locked box, safe or other secure location. Some thieves break into houses or apartments to get this information; others go through trash cans and dumpsters to get account numbers from discarded bills or statements. Always shred anything with insurance claim numbers or other sensitive information that can be used without your permission.
The FBI says you should never sign blanket approval to health insurance companies or health care providers to bill you for services rendered. Always get the information in advance and know what you'll be expected to pay out of your own pocket. If something suspicious shows up on your insurance statement, you'll be able to dispute the charges right away.
Check out the next page for information on how to report identity fraud.