What is medical identity theft, and how does it occur? Description and tips for prevention

What is medical identity theft? 

Medical identity theft is a form of fraud that occurs when someone steals and uses your personally identifiable information (PII) to access medical services, buy prescription drugs, or submit fraudulent claims to health care providers or your health insurance company. In some cases, medical identity theft can lead to broader forms of identity fraud, such as opening credit accounts or filing false tax returns in your name, depending on the type of personal information stolen.

Falling victim to medical identity theft can have severe consequences beyond having your personal data stolen. It can lead to you being denied coverage or being charged for prescription drugs you didn’t order. You may also face reductions in your health insurance benefits or increases in your premiums without you knowing.

Types of medical identity theft

Thieves use various methods to steal your PII from medical records and systems, but their approaches can generally be classified into three separate categories. 

• Provider-related medical identity theft: When your PII is obtained and misused by your medical providers or health insurance company, usually to file fraudulent claims.
• Patient-related medical identity theft: When another patient uses your PII to get treatment, access medical services, or buy medical prescriptions under your name.
• Hospital-related medical identity theft: When personal patient data from a hospital’s database is misused, often due to insider threats (such as employees accessing data without authorization) or external breaches, rather than misconduct by the institution itself.

What personal information can be used for medical identity theft?

Information like your full name, date of birth, place of birth, or current address can all be used in various types of fraud or criminal schemes. Certain medical records can contain even more sensitive personal data, like your health insurance details. Your health insurance company may retain limited financial information, such as direct deposit details, to process reimbursements and administer benefits. If these records are compromised, details like your bank account, Social Security number, and other financial details can also be stolen and used for further criminal schemes.

How can medical identity theft occur? 

Due to the wide range of data that the medical sector collects, malicious actors can use numerous avenues to target personal data and medical records. Below are several approaches you should be aware of:

Document theft or loss

Many hospitals and medical providers have made the shift to digital medical forms and health insurance records. However, some still rely on traditional paper-based systems for certain processes. Unauthorized individuals (including insiders or external actors) can gain access to these documents or adopt a bolder approach and steal them directly from healthcare facilities.

Even electronic health records aren’t exempt from this risk. If your health insurance or healthcare provider keeps records on offline mediums like USBs or external hard drives, those devices can be easily targeted and stolen by criminals.

Data breaches

Data breaches remain one of the most common ways to steal medical information. A significant volume of medical records and patient PII is stored in online databases that may not have the best or up-to-date security, making them easy targets for cyberattackers. These attacks can be done remotely or physically, with the thief gaining access to an unsecured computer within a hospital or clinic setting.

With data breaches, there’s a constant race between the increasing sophistication of cyberattacks and how fast or preventative security responses are. And because medical providers like hospitals or country-wide clinics store vast amounts of valuable patient information, they’re always a target for medical identity theft schemes.

Social engineering 

Social engineering attacks are often small in scale but highly targeted, relying on personalized attempts to gain the trust of medical providers or patients. Once the attacker has established trust, they’ll exploit it to manipulate individuals or healthcare staff into disclosing medical records and PII.

Some of the most common social engineering attacks include phishing and smishing scams. In phishing attacks, a cybercriminal pretends to be a trusted entity like a hospital representative or a bank to steal information. Smishing scams involve criminals using SMS messages to trick recipients into giving up medical or personal information. These attacks can be executed on a large scale or as part of a more targeted campaign. 

Internal threats in healthcare organizations

Healthcare organizations are aware of the external threats posed by hackers and thieves targeting patient data. However, in rare cases, individuals within healthcare organizations may also commit medical identity theft or healthcare fraud.

How do healthcare institutions protect medical data?

Healthcare institutions and medical providers adhere to several legal regulations and standards designed to protect patient data and privacy. Among these regulations, the Health Insurance Portability and Accountability Act (HIPAA) is the most well-known.

Health organizations are also expected to have a multi-layered security strategy to protect medical records and PII, which include (but are not limited to):

• Site security. Any locations storing patient data like offices, data centers, or medical record rooms must be locked, guarded, and otherwise protected against unauthorized access.
• Employee training. Healthcare institutions are expected to provide periodic data security training to nurses, doctors, hospital staff, or anyone who has access to patient medical data.
• Cybersecurity and data storage solutions. Healthcare institutions and providers keeping digital records should invest in electronic medical record (EMR) and electronic health record (EHR) software with robust security.
• Access controls. Healthcare institutions must implement comprehensive access controls to ensure that anyone accessing patient records is authorized and tracked appropriately.

Threats to patient medical data

While the security systems and strategies discussed above can offer some level of protection against the most common forms of medical identity theft, they’re not foolproof. More sophisticated attackers can exploit vulnerabilities and expose weaknesses within these systems. 

Some of these threats to patient medical data include:

• Imperfect implementation. Healthcare institutions and providers implementing security strategies can still be vulnerable to theft of medical data if their protections are poorly applied or not up to date.
• Human error. Sometimes attackers don’t have to take active measures to steal a patient’s medical data. The data may simply have been inadequately guarded or protected in the first place.
• Evolving attack methods. Cybercriminals constantly improve on their methods to steal valuable medical and insurance information, which healthcare institutions may not always keep pace with.
• Sabotage or illegal operations. In rare cases, individuals within health services may exploit their access to steal a patient’s medical data, taking advantage of the trust placed in these institutions.

These gaps highlight why it’s crucial for healthcare organizations to implement a strong security strategy to keep patient information safe. It’s also important for patients to hold their medical provider or insurance company liable in case of unauthorized or illegal activity involving their data.

Consequences of medical identity theft

Medical identity theft can have serious legal consequences for those involved in committing it. Individuals who steal or misuse someone’s medical information may face charges such as identity theft, wire fraud, healthcare fraud, and even conspiracy depending on the nature and scope of the crime.

Penalties can include substantial fines, restitution payments, and prison time. In cases involving organized fraud rings or insider abuse within healthcare organizations, the legal outcomes can be especially severe.

In addition to criminal charges, those involved may also face civil lawsuits from victims or healthcare providers. These legal actions aim to recover damages and help prevent future misuse of sensitive health data.

What are the red flags that indicate medical identity theft?

Certain warning signs can help you recognize when your personal medical information may have been compromised. You may be a victim of medical identity theft if you:

• Are alerted by institutions like your bank, credit reporting agency, or hospital regarding suspicious activity. 
• Receive documentation for medical bills, medical care, or prescription drugs that you didn’t order or benefit from.
• Are denied medical care, insurance coverage, or other healthcare services or benefits without clear justification.
• Have medical records that don’t match your PII or other historical records kept by your healthcare provider.

In short, if you notice any discrepancies in how you’re processed within the healthcare system or unexpected changes in your finances, it could be a sign that your medical data has been stolen.

What to do after you’ve been made a victim of medical identity theft

Once you’ve confirmed that you are a victim of identity theft, you should immediately do the following to prevent as much damage as possible:

• Report it to the proper authorities. In most cases, this process includes contacting your local police, the Federal Trade Commission (FTC), and your healthcare provider. You may also want to notify your bank and credit bureaus if financial information has been compromised.
• Secure your records. Ask your healthcare provider and bank to review and verify all records associated with your identity. Ensure that your information is up to date and accurate. You may also ask them to implement identity verification measures for all future records and transactions for added security.
• Prevent future theft. Make sure to address the vulnerabilities that led to your information being stolen. This step may involve switching healthcare providers or adopting stricter practices in protecting your personal data. You can also consider investing in identity theft recovery solutions.

How to prevent medical identity theft 

One of the most effective ways to prevent medical identity theft is to be aware of the risks. Beyond vigilance, you can follow several best practices to further protect your personal information and prevent medical identity theft:

• Be mindful of how you share your medical information with anyone, whether a medical provider or otherwise.
• Monitor your credit score, credit card, and other finances that are linked to medical and healthcare services.
• Avoid sharing your PII unless it is specifically required by a trusted entity that you’ve verified is legitimate.
• Become proactive in understanding how your data is stored, whether in digital or physical systems.
• Consider using an identity theft protection service like NordProtect, which sends you security alerts in case your personal data gets leaked.

Other types of identity theft

Medical identity theft isn’t the only threat to your PII. You also have to watch out for other types of identity theft.

• Financial identity theft: When someone uses your personal banking or financial details to access your finances.
• Tax identity theft: When someone uses your tax details to make fraudulent claims or file false tax returns.
• Social security theft: When someone uses your Social Security number to open credit accounts, make purchases, and otherwise assume your identity without your knowledge.
• Employment identity theft: When someone fraudulently uses your personal details to get hired, allowing them to claim a salary, benefits, or reimbursements in your name or gain access to restricted areas and databases.
• Criminal identity theft: When someone uses your personal details in the act of committing a crime, which can falsely implicate you once the crime is investigated.

What makes these types of identity theft concerning is their interconnected nature. Falling victim to one type of theft can open the door for other types to occur. For example, if a thief steals your Social Security number from your medical provider, they can use it to open credit accounts in addition to obtaining medical services.