The Rising Threat of Healthcare ID Fraud: What Is The Solution?


06 May
06May

Where once fraudsters were only after our wallets, now they want it all. A new game is in town - Healthcare ID theft. Identity thieves have advanced in the schemes they previously used, and today, they don’t care about what it might cost us. You might be surprised to learn that from the total 6355 data breach incidents reported in the U.S. between 2005 and 2019, 3912 were reported in the healthcare sector alone. This clearly indicates that the healthcare industry is ripe for identity theft. Additionally, healthcare ID fraud has particularly increased within the last five years.

Healthcare Industry Under Attack

Data breaches in the prior years did not affect banks as much as they did healthcare institutions, service providers, and even the patients. Numerous data breach reports have revealed that while data thefts in business sectors such as IT, product manufacturing, and financial services have been under control, its threat has skyrocketed in the healthcare sector.

A major contributing factor is the COVID-19 pandemic. With the telemedicine industry and remote medical consultations becoming the new norm, more healthcare ID information has become available online. This provides an opportunity for hackers, enabling them to steal confidential patient data through the company’s online database.

Why is this Industry Targeted?

Although these numbers appear alarming, the overall trend is not completely unexpected. Particularly because healthcare ID information is sold at a much higher price in the black market (or the dark web) than any other personal data. In fact, the price is multiplied by as much as 50 times.

By compromising healthcare ID information, identity thieves use it to gain access to medical treatments, receive surgeries, and even refill OTC drugs. On top of this, the criminal’s medical history then becomes intertwined with the original patients. This can prove to be detrimental not for just the patient, but the fraudster as well.

Studies have reported that incorrect diagnosis occurs because of confusion in the medical history due to identity thefts and weaknesses found in the patient identification policy.

In total, medical identity theft causes an economy to suffer losses worth USD 24.7 billion per year.

Is it an External Threat?

The biggest surprise in the context of healthcare ID attacks is that not every data breach resulted because of outside players. In fact, internal players have caused greater havoc to the industry by selling insider information. This includes exposing an account’s password, knowledge about new medical treatments, online databases, ways to bypass a security check, names of easy targets, payment card details, and much more.

On the contrary, healthcare employees also cause data breaches unintentionally at times. This happens when employees accidentally reveal some sensitive patient information that fraudsters can use to their advantage. To minimize this threat, hospitals and pharmacies are seeking automated solutions. As automated services are less prone to making errors than manual methods, accurate patient identification and detection of healthcare ID fraud can both be achieved through a single process: Know Your Patient.

KYP, An All-In-One Solution 

The first step to safeguard a healthcare institution and the patient’s data is to hire a third-party identity verification (IDV) provider. These third-party service providers integrate an IDV solution for accurate healthcare ID verification, whether needed to authenticate patients or employees. Once the software has been installed, the Know your patient process can begin.

The first step to safeguard a healthcare institution and the patient’s data is to hire a third-party identity verification (IDV) provider. These third-party service providers integrate an IDV solution for accurate healthcare ID verification, whether needed to authenticate patients or employees. Once the software has been installed, the Know your patient process can begin.

  1. Patients log in to the website and provide information for registration
  2. The patient is required to  upload a selfie along with their official ID document
  3. The IDV provider automatically extracts biometric information from the selfie and the written details from the ID document
  4. After verifying the two and cross-matching the information, the patient is onboarded within seconds while fraudsters are filtered out

How Does This Process Add Value?

The strength of the KYP process lies in its ability to weed out criminals. As the IDV solution can detect modified, false, and stolen documents, the identification of legitimate patients becomes clear. Secondly, the process also allows healthcare institutions to stay compliant with regulatory obligations, such as HIPAA. Other benefits include:

  • Elimination of medical identity theft 
  • Enhanced healthcare ID information security 
  • Age verification, to avoid distribution of drugs to minors
  • Authentication of patients filing for insurance claims
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