Iris scanning and other biometrics block out schemesBy A. Mizan Rahman
May 16, 2013
Biometrics shift the battleground to preventing instead of chasing fraud
Abstract: As healthcare spending grows at roughly 1.5 times the GDP growth rate and soon will swallow 20 percent of the U.S. economy, the burden on healthcare providers to slash fraud and system costs ratchets up the pressure to find solutions that work in lockstep with the rapid digitizing of medical records. Fortunately, new tools such as biometric patient and provider identification have surfaced. They support a preventative approach that offers a more proactive strategy for stopping healthcare fraud before claims are paid. Providing safety and security along with stopping fraud and waste extends to almost every deployment of biometrics for individual identification authentication. Biometrics technology eliminates healthcare fraud at the point of service. Patients cannot falsify their identities, and it helps prevent dishonest providers from submitting bogus claims. More importantly, biometric patient identification is entirely a pre-payment solution. No more pay and chase and trying to recoup paid claims. Private or government health insurers receive this confirmation before the bill is paid. Using biometrics to identify patients can greatly enhance hospital initiatives to increase patient safety levels, eliminate identity fraud at the point of care, reduce risk and establish patient-care audit trails.
It’s difficult to talk about how healthcare affects the economic vitality of the U.S. without mentioning the devastating impact of insurance fraud. The FBI views fraud as a rising threat, with national healthcare spending soaring above $2.7 trillion annually and expenses continuing to outpace inflation.1
Overall, schemes by medical providers and patients steal $70 billion–$255 billion per year (3–10 percent of healthcare costs), according to varied estimates. Fraud also accounts for roughly 10 percent of our nation’s annual healthcare expenditures.
And this crime continues to be the top category for arrests and convictions each year, says the Coalition Against Insurance Fraud.2
As healthcare spending grows at roughly 1.5 times the GDP growth rate and soon will swallow 20 percent of the U.S. economy,3 the burden on healthcare providers to slash fraud and system costs ratchets up the pressure to find solutions that work in lockstep with the rapid digitizing of medical records.
Fortunately, new tools such as biometric patient and provider identification have surfaced. They support a preventative approach that offers a more proactive strategy for stopping healthcare fraud before claims are paid.
And for good reason. Healthcare fraud has a direct, negative impact on human life, reducing resources needed to fund quality patient care. In almost every other area of healthcare, organizations know their costs of staffing, accommodation, drugs, procurement and many other factors. But only recently has focus shifted to more precisely defining fraud and error costs. Because of this, fraud is now considered one of the great cost outliers.
The organization, distribution, and consumption of healthcare services is becoming increasingly complex and expensive, especially for government programs like Medicare and Medicaid.
Historically, these programs have used the ineffective “pay-and-chase” model to combat fraud. It lacks substantial preemptive measures to attack the root of the problem and flag scams before payments are made. This model also requires intensive resources and massive manpower, with a relatively low ROI.
Industry growth and increased abuse require a shift to the more preventative approach. This model deploys modern technology to improve detection, and attack fraud and waste before services are rendered or claims submitted. Catching fraud before the damage is done is the only way to effectively address the core problem and stop its devastating impact on the safety and economics of healthcare.
Traditionally linked to sci-fi movies and government anti-terrorism efforts, biometrics has become more refined and less expensive. A host of industries around the globe thus are increasingly using biometrics as a practical identification tool.
“Many solutions to eliminate fraud suggest hiring more prosecuters...hiring more prosecutors is pointless if you can’t catch the criminals you seek to prosecute.”Although its purpose varies with each industry, providing safety and security along with stopping fraud and waste is a common thread that extends to almost every deployment of biometrics for individual identification/authentication.
Healthcare fraud continues to be a pressing problem that can lead to medical information tampering that puts a patient’s health at risk. Swindlers often attempt to assume the identity of another patient, provide different names each time they visit a medical facility, or falsify ID documents to create multiple identities.
Biometric patient identification technology eliminates healthcare fraud at the point of service. Patients cannot falsify their identities, and it helps prevent dishonest providers from submitting bogus claims.
Using biometrics to identify patients creates an irrefutable audit trail that can prove patient identity at the time of service, thus eliminating fraudulent billing.
Most provider fraud involves billing for services not rendered. Replacing a conventional patient sign-in sheet with a biometric device, biometric software can provide a government or private insurer an auditable medical record of the patient being billed and physician submitting the bill. It also confirms the patient’s presence on the date of the service. This simple switch to a biometric patient ID system can eliminate billions of dollars in “phantom” claims.
Some 31 percent of respondents say they shared their personal ID with a family member to obtain medical services, reveals a 2012 study on medical ID theft by the Ponemon Institute.4 Biometric patient ID systems eliminate “card swapping” fraud where members loan their insurance card to another (usually someone within their family) to receive fraudulent benefits.
By creating a biometric template that links to each patient’s ID, a patient cannot use someone else’s insurance card. The member ID would be the same, but the biometric template is different for each person and would be rejected before medical service is provided.
Many solutions to eliminate fraud suggest hiring more prosecutors or using advanced software such as predictive modeling to discover fraudulent claims patterns. But both approaches are resource-intensive and require significant financial investment. First, hiring more prosecutors is pointless if you can’t catch the criminals you seek to prosecute. Second, software looks for patterns that flag fraudulent claims. But biometrics looks for patients instead of patterns.
We could all agree that in almost every instance if a patient never entered a medical office on the date of the submitted bill, adjudicating a claim and performing datamining aren’t necessary. Only biometrics can confirm patient presence at the point of service, because patients must physically enter the office to provide their biometric identity for medical services.
More importantly, biometric patient identification is entirely a pre-payment solution. No more pay and chase and trying to recoup paid claims. With biometrics, private or government health insurers receive this confirmation before the bill is paid.
Biometrics also protects providers and patients from medical identity theft, which is the world’s fastest growing form of identity theft.5 By linking a patient’s ID to a biometric ID, the biometrics would never match even if patients had their medical identity stolen.
Biometrics also protects medical providers from liability by ensuring their electronic medical records are accurate and not filled with false information based upon a stolen medical ID.
The movement to electronic medical records and health information exchanges is intensifying following enactment of the incentive-laced Health Information Technology for Economic and Clinical Health Act (HITECH) as part of the American Recovery and Reinvestment Act of 2009. Thus it is critical that patient information is accurate to avoid catastrophic consequences when a provider relies upon another physician’s record based upon a false identity.
Finally, the argument that capturing and storing a biometric template violates patient privacy is often fueled by misunderstanding of how the technology works. Biometric matching systems encrypt and convert images to a numeric code to protect patient privacy.
The proof that biometric patient identification systems can have a significant impact in preventing certain elements of healthcare fraud is illustrated by examining the financial impact of the technology based on total annual patient visits in the U.S. by type (data from the Centers for Disease Control and Prevention):6
Using a conservative estimate of $100 billion in annual healthcare fraud and realizing that the provider, patient and insurer each assumes some of this cost, we can calculate these statistics:
The problems that healthcare fraud induce are not isolated to the U.S. Annual global healthcare expenditures are $5.7 trillion, the World Health Organization and Centre for Counter Fraud Studies estimates. Each year, 7.29 percent of that, or an estimated $415 billion, is lost to fraud and error.7
Healthcare facilities around the world are increasingly evaluating modern patient ID technologies to reduce fraud, waste and system costs, and increase the quality of care. Biometric patient identification, smart cards and probabilistic matching are among the technologies garnering more attention as practical, affordable solutions that can directly address healthcare fraud.
However, biometrics presents distinct advantages over other patient ID solutions to prevent fraud at the point of service.
The evolution of biometric patient ID technology over the last 5–6 years has stemmed from advances in research and development, field- testing, resulting refinements, and the ability to combine two or more modalities (or multi-factor authentication).
The early days of biometric patient identification relied on fingerprint technology, which is the oldest and most familiar modality. But fingerprints also have limits. Among the limits are physical contact with a hardware device, low skin integrity, climate and the stigma of fingerprinting to criminality. Fingerprints thus have given way to vascular biometrics (e.g., palm vein technology).
Vascular biometrics are an improvement over fingerprinting. But because of limits to its ability to prevent fraud at the point of enrollment,8 iris biometric patient identification is now considered the ideal biometric patient ID modality in healthcare. Iris biometrics are widely considered the most accurate, stable, fast, scalable and non-invasive form of biometric identification.9 More hospitals also are evaluating and adopting it as a hygienic patient ID solution that supports hospital infection-control efforts.
Modern uses of biometrics to prevent healthcare fraud involve more than hospitals and medical centers. They cover other point-of-care services in numerous patient-ID and provider-verification capacities.
For example, in response to the rising tide of Medicaid fraud and shift from “pay and chase” to more proactive and preventive safeguards, clinics and pharmacies in New York State are adopting palm scanning for patient ID to cover medication distribution.10
Florida recently launched a program that uses voice biometrics to verify that home health services actually were delivered to the Medicaid recipient.11 A hospital in New York adopted fingerprint biometrics to verify physician identities. The system also manages how employees access patient records to protect sensitive data against being stolen in large volume and sold on the black market for false treatment claims often worth millions of dollars.12
As health insurers continue expanding security measures to thwart data breaches, expect to see more biometric ID technology to protect physical access to restricted areas that store sensitive patient data within healthcare facilities. The current card-swipe and radio-frequency identification badges can easily be stolen, swapped or illicitly shared. They will increasingly be replaced by biometrics.
The costs of practical biometric solutions will continue dropping, making them more accessible to more health providers. Also look to see more mobile devices with embedded biometric technology to identify patients and authenticate staff access to sensitive data.
Shifting to a more preventative approach with advanced technological tools like multimodal biometric patient ID systems helps address the core issues that can reduce healthcare fraud and waste.
Total U.S. healthcare spending is the highest in the world. Roughly 17.3 percent of GDP is spent on healthcare, and medical costs are rising faster than wages or inflation.13 Biometrics offers many clear advantages in reducing overall healthcare costs, eliminating fraud and waste, and improving the quality of care. Healthcare providers thus should carefully consider biometrics as they shift to more efficient care-delivery models and improve preventive approaches to schemes.
Biometrics is a versatile tool for preventing fraud at the point of service, but also protecting patient safety and lowering legal liability. Using biometrics to identify patients can greatly enhance hospital initiatives to increase patient safety levels, eliminate identity fraud at the point of care, reduce risk and establish patient-care audit trails.
About the author: A. Mizan Rahman is Founder and CEO of M2SYS Technology, a global biometrics research and development company.
 The Federal Bureau of Investigation (FBI), “Rooting out healthcare fraud is central to the well-being of both our citizens and the overall economy,” available at http://www.fbi.gov/about-us/investigate/white_collar/health-care-fraud.
 Coalition Against Insurance Fraud, “Fraud Statistics,” available at http://www.ponemon.org/local/upload fileThird_Annual_Survey_on_Medical_Identity_Theft_FINAL.pdf http://www.insurancefraud.org/statistics.htm#.USJO56WcF5k.
 Forbes, “The U.S. Does Not Have a Debt Problem, It Has A Healthcare Cost Problem,” February 9, 2012, available at http://www.forbes.com/sites/toddhixon/2012/02/09/the-u-s-does-not-have-a-debt-problem-it-has-a-health-care-cost-problem/.
 Ponemon Institute, Third Annual Survey on Medical Identity Theft, June 2012, available at
 Medical Consultants Network, “Medical Identity Theft, The Fastest Growing Type of Identity Theft in the World,” August 2012, available at http://mcntalk.com/2012/08/20/medical-identity-theft-the-fastest-growing-type-of-identity-theft-in-the-world/.
 Centers for Disease Control and Prevention, available at http://www.cdc.gov/nchs/fastats/ervisits.htm
 World Health Organization, “Prevention not cure in tackling healthcare fraud,” December 2011, available at http://www.who.int/bulletin/volumes/89/12/11-021211/en/index.html.
 Advance for Health Information Professionals, “Defining Patient Verification & Identification in Healthcare,” August 2012, available at http://health-information.advanceweb.com/Features/Articles/Defining-Patient-Verification-Identification-in-Healthcare.aspx
 International Biometrics Industry Association (IBIA) “Iris,” available at http://www.ibia.org/biometrics/technologies/iris.
 PR Newswire, “Biometrics Limits Abuse While Improving Convenience,” available at http://www.marketwatch.com/story/biometrics-limits-abuse-while-improving-convenience-2013-01-29.
 Florida Agency for Health Care Administration (ACHA), “Florida Agency for Health Care Administration Implements Telephonic Home Health Pilot Project in Miami-Dad County,” available at http://www.fdhc.state.fl.us/executive/communications/press_releases/archive/docs/2010/2010-05-05-AgencyImplementsTelephonicHome%20HealthPilotProjectinMiami-DadeCounty%20-PRESS_RELEASE.pdf.
 Information Week Healthcare, “Biometrics Shore Up Patient Data Security,” available at http://www.informationweek.com/healthcare/security-privacy/biometrics-shore-up-patient-data-securit/232602165.
 HealthAffairs, “Health Spending Projections Through 2019: The Recession’s Impact Continues”, available at http://content.healthaffairs.org/content/early/2010/02/04/hlthaff.2009.1074.full.
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