Last updated: 16 June 2015
I recently spoke on a panel at the Smart Card Alliance’s 14th Annual Government Conference on an issue I frequently discuss—moving Medicare into the 21st century with electronically readable cards.
The issue is highly topical in Washington, D.C. because of two recent developments: the signing by President Obama of the Medicare Access and CHIP Reauthorization Act of 2015 , which (among other provisions) would finally strip the Social Security number (SSN) of recipients off their Medicare cards; and the release of a report by the Government Accountability Office (GAO) on the potential switch to electronically readable cards for the Medicare program, which covers more than 54 million Americans.
The decision to stop using the SSN as Medicare recipients’ identification number is notable because of the major risk of identity theft posed to seniors in displaying this critically private information on an easily lost or stolen paper ID. Certainly, with this policy decision, the move to electronically readable cards seems more relevant than ever before.
The GAO’s report was commissioned by several members of Congress, and evaluates the different functions and features of electronically readable cards, including smart cards as well as magnetic stripe and barcode cards. It also examines the potential benefits and limitations associated with the use of electronically readable cards in Medicare for both patient and provider.
The report found that smart cards—which contain a microprocessor chip—would allow for “storing and exchanging medical information and conveying beneficiary information,” and would offer “substantially more rigorous authentication of the identities of Medicare beneficiaries and providers than magnetic stripe or barcode cards,” particularly since magnetic and barcode cards can be easily counterfeited.
Moving to smart card technology makes a great deal of common sense. It would certainly protect seniors’ identity, because sensitive information such as their SSN would be stored on the chip, which is much more secure than printing the information right on the card because it could only be accessed with additional authentication, such as a PIN. The use of smart cards could also reduce Medicare fraud, which costs taxpayers an estimated $60 billion a year—a staggering number for a program on the brink of bankruptcy. It could also improve the provider reimbursement process, which is cumbersome and prone to errors.
Most promising for all Americans who participate in Medicare, the use of smart cards could advance technologies that could improve health outcomes and save lives, such as electronic health reporting. A doctor’s access to a patient’s basic health information on a secure smart card could be the key to reducing medical errors and ensuring the right course of treatment.
Electronically readable cards have been used to access health services in several European and Asian countries for decades. The GAO notes that France and Germany have used smart cards in their healthcare systems since the 1990s. With Medicare remaining a critically important program for American seniors, it’s time to make sure we protect it with proven technology that is available right now.