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Can Smart Cards Save the U.S. $370 Billion in Medicare Fraud?

Identity, Healthcare and Government Topics at the Smart Card Alliance Annual Conference

PRINCETON JUNCTION, NJ, May 10, 2011–A smart card-based Medicare identity card could save the United States $370 billion over 10 years, according to Kelli Emerick, executive director of the Secure ID Coalition. Speaking at the Smart Card Alliance 2011 Annual Conference, Emerick said a smart Medicare ID could reduce the $60 billion annual Medicare fraud by 66 percent, for a net annual savings of $37 billion after program costs.

The idea is getting interest from a Congress eager to find ways to save money according to Emerick. She told attendees that Senator Mark Kirk (R-Ill.) questioned Health and Human Services Secretary Kathleen Sebelius about the outdated Medicare card issued to America’s seniors at a recent budget hearing. In a system that is riddled with fraud, waste and abuse, Sen. Kirk suggested that knowing who is receiving services and who is providing them could significantly lower costs, and he recommended the agency look at the Department of Defense chip-based Common Access Card (CAC) as a model.

The American Medical Association (AMA) is looking into the idea of a personal health information card. Dr. James J. James, director of the AMA Center for Public Health Preparedness and Disaster Response, presented an update on an AMA pilot program investigating ways to improve the availability of health information for individuals, especially in disaster situations such as the Katrina hurricane. He said that there were thousands of people in the Katrina disaster that needed medical care but were not able to provide any of their personal health history nor even identify themselves, due to age, mental illness or injury. The AMA’s idea is to create an individual health ID card that contains important information such as allergies or special medical problems. One important finding of their focus groups is that people want to have a health information ID card and are willing to put their personal health information on it, as long as they have some control over who can see what. As for the technology of the health ID card, James said, “Whatever we have, it’s going to be a smart card.”

There were several presentations on the National Strategy for Trusted Identities in Cyberspace (NSTIC), signed by President Obama in April.

NSTIC is clearly focused on an issue of great and rapidly growing concern to Americans, Patricia Titus, global chief information security officer for Unisys, told attendees. A bi-annual Security Index survey released by Unisys during the conference showed that Americans are significantly more concerned about nearly all aspects of their security compared to six months ago. The largest rise in concern centered on Internet security, measured at levels 35 percent higher than in August 2010, with approximately half of Americans seriously concerned about viruses, spam and the safety of online shopping.

The NSTIC initiative is getting underway with a series of free workshops that are open to the public. Michael Garcia, a cybersecurity strategist for the Department of Homeland Security (DHS) assigned to the NSTIC program office, said the first workshop focusing on governance will be held in early June in Washington, DC. The second workshop is planned for the fall in Boston and will cover the topics of privacy and usability. Another NSTIC priority in 2011 is to define and launch pilot programs.

The federal government is ramping up programs to use PIV cards for network and information systems security and access, which will be a big boost to NSTIC, Garcia said. In February, the Office of Management and Budget issued memorandum M-11-11, “Continued Implementation of Homeland Security Presidential Directive (HSPD) 12.” According to Deborah Gallagher, who chairs the Roadmap Development Team in GSA’s Identity Credential and Access Management office, the directive “puts teeth in HSPD-12,” telling departments and agencies that they must use the PIV card with a PKI certificate to access their networks and information systems. The memorandum included a milestone on March 31, 2011, by which time all agencies were to have named the program lead and submitted an implementation policy. Gallagher reported that as of now, most agencies have named a lead and some have submitted policies, but every group that did not is working on one.

An audio recording of the presentations from the Smart Card Alliance 2011 Annual Conference is available for purchase by clicking on the Conference Audio Archives banner at http://www.smartcardalliance.org.

About the Smart Card Alliance

The Smart Card Alliance is a not-for-profit, multi-industry association working to stimulate the understanding, adoption, use and widespread application of smart card technology.

Through specific projects such as education programs, market research, advocacy, industry relations and open forums, the Alliance keeps its members connected to industry leaders and innovative thought. The Alliance is the single industry voice for smart cards, leading industry discussion on the impact and value of smart cards in the U.S. and Latin America. For more information please visit http://www.smartcardalliance.org.

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