Too often, unauthorized people succeed in extracting protected information from health care providers. Invasion of privacy also affects noncelebrities, when anyone seeks health information the patient has not chosen to share. More often, though, scam artists seek patients' billing information for financial gain. The patient's insurance identifier is then used by an uninsured person to obtain medical services or by a fraudulent health care provider to bill for medical services that were never rendered. Data security breaches and medical identity theft are growing concerns, with thousands of cases reported each year. The Centers for Medicare and Medicaid Services (CMS) tracks nearly 300,000 compromised Medicare-beneficiary numbers.2 The Office for Civil Rights has received more than 77,000 complaints regarding breaches of health information privacy and completed more than 27,000 investigations, which have resulted in more than 18,000 corrective actions.3
Beyond privacy concerns, breaches of health information security exact a weighty financial toll and endanger patients. Abuse of insurance identifiers drains money that would be better spent funding legitimate health care services. When Medicare and Medicaid overpay for services, taxpayers bear those costs. When private insurers overpay, policyholders face higher premiums and copayments. The most obvious toll on the individual beneficiary is financial liability for services that are fraudulently obtained in the beneficiary's name. The beneficiary may also run up against service limits when he or she later seeks reimbursable medical services.
And identity breaches can deleteriously affect the quality of care. Incorrect information can infiltrate the beneficiary's medical record and corrupt later medical decision making. Beneficiaries have been wrongly labeled as