AP Photo

In a defensive move against rampant waste and fraud in the Medicare system, a bi-partisan group of lawmakers has proposed employing “smart card” technology to protect the identity of Medicare beneficiaries and their health-care providers. The new Medicare Common Access Card Act of 2011 would develop a program that uses smart card technology to safeguard seniors’ personal information as well as speed payment to doctors and hospitals.

“The root cause of Medicare fraud is an inability to properly detect fraudulent billing,” said Randy Vanderhoof, executive director of the nonprofit Smart Card Alliance. “Smart card technology can turn the tables on fraudsters, as it has done in everything from wireless devices to passports, by proving the identities of eligible beneficiaries and legitimate health-care suppliers and providers. Last but not least, it would remove the Social Security number from the face of a Medicare card, an obvious identity theft and medical theft risk.”

Upgrading the Medicare system with globally proven smart card technology could save an estimated $30 billion per year that currently goes to waste or fraud. In order for a transaction to be verified, both the beneficiary and the provider would be required to present their smart cards, making fraudulent billing much more difficult. The government’s current tack is to pay for most billings and then try to chase down fraudsters after the fact, known as “pay and chase.”

The AARP, among others, has endorsed the Medicare Common Access Card proposal.

For more on Medicare fraud, see:

NAIC Waiting for CMS Antifraud Guidance

GAO: Medicare Fraud Detection Program Hasn’t Helped

FAST Act would slow down fraudsters