Last week, something happened in Washington, D.C. that was more than 10 years in the planning. The House of Representatives passed the Medicare Common Access Card Act, now known as Fighting Fraud to Protect Care for Seniors – HR.6099. The bill calls for the Centers for Medicare & Medicaid Services (CMS) to conduct three regional pilot programs to evaluate the use of smart cards in Medicare to prevent fraud.
Back in 2010, Peter Roskam, a Republican congressman from Illinois, offered a smart solution to a huge fraud problem. Roskam, a former personal injury lawyer who sits on the House Ways and Means Health Subcommittee, believed Medicare should follow the lead of another industry that had a strong record of rooting out fraud – the credit card industry. Ironically, this was two years before the credit card industry announced its plans to fight fraud by issuing nearly 1 billion smart cards in the U.S.
This bill had been hanging around since 2011, with neither political party willing to challenge CMS, which opposed any new Medicare ID technology. Waste, fraud and abuse in Medicare and Medicaid depletes our treasury, and also forces federal and state authorities to spend tens of millions of dollars every year in law enforcement and prosecution costs by dealing with the crime after the fact rather than preventing it.
Smart cards provide the ability to stop the fraud before it happens by verifying and authenticating valid Medicare and Medicaid users at the time of the transaction. They’re not only a globally recognized tool to help eliminate medical and financial fraud, but a trusted tool of the federal government in assuring identity across a number of critical applications. If CMS were to implement a smart card technology solution – such as described in this bill – it would have the potential to save American taxpayers over half of the estimated $60 billion per year cost of fraud. With over 59 million Medicare beneficiaries, that comes out to approximately $1,000 of fraud per recipient per year. Meanwhile, thanks to a large increase in production volume and other cost factors affecting the smart card industry, the cost of a smart Medicare card is down by at least 50% from 2011.
Authentication of the cardholder as the insured party reduces medical fraud by eliminating card swapping, tampering, and cloning. It can support verification of benefits eligibility at the point of service, ensuring that treatment is restricted to covered services and prescriptions. Smart healthcare cards can also address provider fraud by providing strong authentication of the healthcare provider identity when submitting a claim and by linking treatments with verified patient encounters. This process of verification – authenticating providers authorized to deliver services and bill Medicare, ensuring beneficiaries are authorized to receive those services, and verifying medical suppliers and vendors – will effectively remove much of the fraud that’s been happening.
The path to seeing this bill becoming law is not guaranteed since it must pass the Senate and be signed by the president. For now, we celebrate and hope that common sense and the urgent need to address waste, fraud, and abuse in our Medicare and Medicaid system will prevail.