For all the fuss about the digitization of healthcare information, Medicare still remains woefully behind on one basic level.
The nation's largest health insurer still issues paper cards to all beneficiaries enrolled in the traditional Medicare program, who then show the cards to providers once they receive care. Medicare could benefit by moving to a system of electronic cards, according to a report from the Government Accountability Office. But such a switch could be costly for providers and create a host of problems with current electronic health records.
The GAO interviewed 46 domestic and international healthcare organizations about the issue of paper and electronic Medicare cards, including Aetna, the CMS, Epic Systems Corp., Kaiser Permanente, UnitedHealthcare and federal health agencies in France and Germany. The use of electronically readable cards has presented itself as a way to potentially limit fraud and abuse and cut down on reimbursement errors.
Smart cards, magnetic stripe cards and bar code cards were the three options the GAO examined. Smart cards contain computer chips, which could store all pertinent information of a Medicare beneficiary. France and Germany both use smart cards for health insurance, and the GAO said they would be the most beneficial for proving the identity of a Medicare patient and storing secure health data.
Magnetic stripe and bar code cards—such as debit cards—are more susceptible to copying or counterfeiting. But they would still be an improvement from the tree-based solution of today, the GAO said. Some insurers, such as UnitedHealthcare, already use magnetic stripe and bar code cards for their privately insured and Medicare members.
The most common types of fraudulent schemes that electronic Medicare cards would prevent are those that involve authenticating a patient's identity. For example, providers would have a much more difficult time submitting claims for services that were never rendered if they had to swipe an electronic card at the point of care. The CMS said there are about 284,000 Medicare beneficiary numbers that had been compromised as of May 2014.
But electronic cards are far from a panacea to rid Medicare of all fraud, the GAO said. Most Medicare fraud relates to referral kickbacks or misrepresenting the type of care that was provided, which doesn't involve authenticating someone's ID.
The CMS would also have to persuade hospitals and doctor groups to adopt technology that would accept Medicare's electronic cards—an unappetizing expense as they work through the government's bigger meaningful-use and electronic health-record requirements.
“The success of any electronically readable card system will also depend on participation from healthcare providers, and therefore any planned use will need to take provider costs and potential challenges into consideration,” the GAO report said.
For what it's worth, Congress made one little-noticed change to Medicare cards within the sustainable-growth rate bill that was signed into law this month. Section 501 says Medicare cards will no longer include the Social Security numbers of beneficiaries, a change that will cost $320 million through 2018.