News Feature | January 6, 2015

Smart Cards Cut Costs

Katie Wike

By Katie Wike, contributing writer

ACOs To Reduce Medicaid Costs

A WEDI report finds smart cards could be the answer to reducing the threat of medical identity theft, and the Smart Card Alliance adds that using them could save billions.

WEDI’s latest report, Secure Patient Identification: Feasibility of a Security Role for Subscriber ID Cards, highlights the security benefits of patient smart cards. According to the white paper, “subscriber identity tokens,” or smart cards, contain microprocessors which can encrypt and store a patient’s personal health information. WEDI also advocates the use of a Real-Time Patient Arrival Identification (PAR) process in conjunction with the cards.

“Currently, patient records are matched from different providers and different times using probabilistic methods such as matching on name, address, birth date, and other data. Error rates may be 10-15 percent,” the white paper explained. “The PAR process verifies the patient with a biometric, and it sends the patient’s encounter biometric template along with patient and insurance identification to the [Enterprise Master Patient Indexes], where the match engine definitively links the patient to existing records.”

Health IT Security reports that, while WEDI admits not all errors would be eliminated, this option would surely improve the integrity of patient records. The cards would also cut fraud in the healthcare sector and save the country billions.

“Healthcare fraud costs the U.S. about $75 billion a year. According to WEDI, implementing smart card technology could cut fraud costs for patients and providers by a third, or $25 billion annually,” said Randy Vanderhoof, executive director of the Smart Card Alliance in support of WEDI’s conclusions. “The white paper highlights fraud and medical identity theft reduction as some of the major benefits of implementing smart cards for patient identity verification.”

According to the Alliance, smart cards have the potential to provide all of the following benefits:

  • Positive patient identification. Currently, patient records are matched from different providers and different times using probabilistic methods such as matching on name, address, birth date and other data. Error rates may be 10 to 15 percent.
  • Reduced medical identity theft. Estimates in 2012 indicate 1.85 million patients are victims of medical identity theft annually.
  • Improved coordination of patient health records, especially from different providers.
  • Potential for more accurate, complete, longitudinal personal health records from different providers and different times, with increased privacy.
  • Improved patient safety and reduction in redundant tests.
  • Reduction in claim fraud in the billions of dollars.