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Medicare Fraud is Ripe for a Tech Solution, But It's Complicated

Scott Mace, for HealthLeaders Media, September 10, 2013

If CMS could be sued for HIPAA violations, it would be. But behind tales of government inefficiency and inertia is a tremendous debate. Summed up, the very technology that could solve our identity and fraud problems could open up tremendous privacy concerns.

Depending on who you talk to, Medicare fraud is estimated to be a $48- to $120-billion-a-year problem in the United States. Yet, for all the technology this country cranks out, surprisingly little so far has been applied to combating this problem. Could it take another act of Congress?

On August 15, Rep. Jim Gerlach, a Republican from Pennsylvania, introduced H.R. 3024, the Medicare Common Access Card Act of 2013.

Under the proposal, within 18 months of passage, the HHS secretary would conduct a pilot program utilizing smart card technology for Medicare beneficiaries.

Smart cards are devices that contain an embedded integrated circuit chip that can be either a secure microcontroller or equivalent memory, or a memory chip alone. That's the definition put forth by the Smart Card Alliance, a trade association that supports H.R. 3024. Other supporters include the AARP, the ACPE (American College of Physician Executives) and the AAOS (American Association of Orthopaedic Surgeons).

Smart card technology is already commonplace in employee key cards, transit cards, credit cards (outside the U.S., and in the U.S. starting by 2015), and more. I even have a smart card that allows me to easily rent bicycle locker space at transit stations in the San Francisco Bay Area, at the big-ticket rate of 1 to 3 cents per hour.

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3 comments on "Medicare Fraud is Ripe for a Tech Solution, But It's Complicated"


Frank Poggio (9/12/2013 at 2:57 PM)
Scott, Great post, good summary. As I have said on this blog and others, it is not a technical problem, but a political and sociological one. Till they get those resolved there can be no cost efficient or user friendly solution.

Randy Vanderhoof (9/12/2013 at 10:11 AM)
Solving the Medicare fraud problem is not that complicated. Much of what you reported I agree with, but I take issue with the threat to privacy concern that you mention. The Smart Card Alliance has published numerous reports that address the appropriate use of smart card technology for healthcare use. To begin with, the Medicare Common Access Card Act of 2013, aims to fix an existing privacy problem by taking the current personal identifier, you social security number, off the front of the card and storing it securely on the smart card chip that can only be read when the cardholder inserts it along with a PIN to an authorized terminal in a medical facility. Also, if the government wanted to extend services for home use, it could provide low cost (under $10) readers for home computers that would enable people to securely access their health records without entering their social security number on the keyboard and exposing it to hackers. A few $millions would reduce medicare fraud by $billions.

Pork Barrel Buster (9/10/2013 at 6:05 PM)
COuld it be that Oberthur, the largest maker of said smart cards, has their US headquarters in Rep. Gerlach's district?