Smart Card Alliance Supports Bi-partisan Smart Medicare Common Access Card Act of 2011

Smart Card Alliance Supports Bi-partisan Smart Medicare Common Access Card Act of 2011

Princeton Junction, NJ, Sept. 27, 2011–To combat a reported $60 billion lost to waste, fraud and abuse within the Medicare system, a bi-partisan group of U.S. senators and representatives led by Senators Mark Kirk (R-IL) and Ron Widen (D-OR) have introduced legislation to use existing “smart card” technology to protect seniors.

The Smart Card Alliance strongly supports the new Medicare Common Access Card Act of 2011 (S. 1551 and H.R. 2925), which would establish a pilot program to develop a secure Medicare card using smart card technology to protect seniors’ personal information, prevent fraud and speed payment to doctors and hospitals. It is estimated that upgrading the Medicare system with globally proven smart card technology could save the American taxpayer $30 billion or more per year in fraud and waste reductions. ¹

“The root cause of Medicare fraud is an inability to properly detect fraudulent billing,” said Randy Vanderhoof, executive director of the 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 healthcare 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.” (Video by U.S. Senator Mark Kirk: Medicare Fraud and the Common Access Card Explained.)

The AARP has also endorsed the Medicare Common Access Card proposal.

The key to preventing fraud is that both the beneficiary and the provider or supplier would have to present their Medicare Common Access Card (CAC) card for a transaction to be verified, putting an end to current fraudulent billing scams.

“Today the government’s strategy is ‘pay and chase,’ a reactive approach that detects Medicare fraud only after it occurs and then chases after criminals to try to recover stolen funds,” said Michael Magrath, chairman of the Smart Card Alliance Healthcare Council and business development director for Gemalto. “The Medicare CAC card proposal turns that completely around with a proactive solution that nips fraudulent claims in the bud before any money is stolen.”

For beneficiaries, a Medicare CAC would contain a cryptographic computer chip and many new security features, such as a PIN code, to protect the card owner’s identity and eliminate counterfeit Medicare cards. Healthcare providers and suppliers would be issued a chip card too, and would face more stringent identity verification measures, such as identity checks, fingerprints and a secure digital photograph encrypted in the provider or supplier ID card, that are aimed at eliminating fraudulent billings.

The precedent of using smart cards for secure identity authentication is well established. Federal government employees and contractors have been issued more than 4.5 million Personal Identity Verification (PIV) cards with secure chip technology, used to control access to government facilities and information systems. Employees of the Department of Defense (DoD) and all branches of the U.S. military use the Common Access Card (CAC), which was the inspiration for the Medicare CAC. The standards created for these secure identity cards could serve as a basis upon which a smart Medicare Common Access Card could be built.

Additional healthcare identity and smart card technology resources are available online from the Smart Card Alliance Healthcare Council.

¹ Secure ID Coalition, Sept. 23, 2011,

About the Smart Card Alliance

The Smart Card Alliance is a not-for-profit, multi-industry association working to stimulate the understanding, adoption, use and widespread application of smart card technology.

Through specific projects such as education programs, market research, advocacy, industry relations and open forums, the Alliance keeps its members connected to industry leaders and innovative thought. The Alliance is the single industry voice for smart cards, leading industry discussion on the impact and value of smart cards in the U.S. and Latin America. For more information please visit