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

Scott Mace, 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.

Scott Mace

Scott Mace is the former senior technology editor for HealthLeaders Media. He is now the senior editor, custom content at H3.Group.


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