Medical Identity Theft is one of the fastest growing crimes in the U.S. and its consequence can be detrimental to both its victims and healthcare providers. According to the National Survey on Medical Identity Theft prepared by Ponemon Institute in 2010, an estimated 1.4 million adults, approximately 5.8% of the U.S population, were victims of medical identity theft in 2009. Medical Identity Theft involves using a stolen identity to get drugs, expensive medical treatment and even fraudulent insurance payouts. Medical identity theft is of great concern because its consequences can be devastating for its victims. Primarily, the victim’s medical record is co-mingled with the imposer’s health information, which may lead to inappropriate and potentially life-threating decisions by medical staff. To make matters worse, medical identity theft is largely a hidden crime. Unfortunately, people only find out through billing collection agencies looking for payment or when insurance companies send Explanation of Benefits (EOB), that include fraudulent claims.

Medical identity theft is also among the most expensive and time consuming fraud of all types for the victims to recover from damages. According to the survey, 29% of victims of medical ID theft didn’t discover the problem until a year after the incident, and 21% said it took two or more years to learn about it. Some victims spend years to completely clear their names, sanitize their medical record of imposer’s health information, and in some cases, bringing their insurance premium back to what they were prior to the crime. In 2009, the average cost of restoring a victim’s identity was $20,160, which at times included making out-of-pocket payments to a health plan provider to restore coverage.