Medicare Smart Cards

Medicare beneficiaries may soon receive “smarter” insurance cards as part of an effort to improve efficiency and fight waste in Medicare. Senators from Democratic and Republican parties submitted legislation to Congress that would upgrade the current paper Medicare card for beneficiaries and Medicare providers to a secure smart card, embedded with a computer chip containing each person’s information.

These smart cards are part of an effort to combat a reported $60 billion lost to waste, fraud and abuse within the Medicare system, U.S. Senators Mark Kirk (R-IL), Ron Wyden (D-OR), Marco Rubio (R-FL) and U.S. Representatives Jim Gerlach (R-PA-06), Earl Blumenauer (D-OR-03) and John Shimkus (R-IL-19) introduced in legislation on September 14,  Medicare Common Access Card Act of 2011, S. 1551. The legislation would establish a special pilot program which would develop a secure Medicare card using smart card technology, with the goal of protecting seniors’ personal information, preventing fraud, and speeding proper payments to providers. 

The technology is actually not that new. The smart cards are very similar to those currently used by the Department of Defense.  The card’s storage would contain the Medicare identity, a digital photo, a PIN for the recipient card and a biometric fingerprint for the healthcare professional card. The smart card would use match-on-card technology so the personal information would never leave the card.

According to the Secure ID coalition, a group of four companies (XTec, Gemalto, NXP, Oberthur) which produces smart cards and other identity protection technologies, there would be a one-time cost of US$ 19 per person to issue the cards and distribute readers nationwide, but that small investment would save taxpayers US$ 675  per Medicare enrollee per year in reduced waste. The coalition has also produced a website to promote the idea.

“Building on the smart cards already issued to all Americans in uniform, we can offer seniors more protection for their identities while reducing fraud and waste in the strained Medicare system,” Senator Kirk said. “By removing a senior’s Social Security number from the front of the card and including the security upgrades used on the cards of our troops, this Secure Medicare Common Access Card will also help end Medicare’s current “Pay then Chase” policy that allows so much fraud and waste.

 Phase one would require the Secretary of Health and Human Services (HHS) to design and implement a smart card pilot program in geographic regions considered to be at high programmatic risk in an effort to increase the quality of care, improve the accuracy in the Medicare billing system, reduce the potential for identity theft and prevent waste, fraud and abuse.

 The second phase, expanded implementation, would occur one year after the start of the pilot program following a HHS report to Congress on the results of the pilot program and the viability of the nationwide expansion and implementation of Medicare Common Access Card technology.

“If you looked at the card carried by every Medicare beneficiary in America you would find their name and their full social security number there for all to see,” Wyden said. “In an age of identity theft, this is simply asking for trouble. The legislation will not only make the identity of America’s seniors more secure, it does so in a way that will ensure that Medicare is paying for the services that are actually being provided. Giving providers and insurers the tools to reliably weed out fraud will only help to improve the experience of dealing with providers and insurers for those acting in good faith. This is an approach that has proven to reduce fraud and abuse and is a common sense approach to safeguarding taxpayer spending.”