A ‘Smart’ approach to Medicare reform

In a recent editorial, Jim Frogue correctly points out that Medicare waste, fraud and abuse would, “be the logical place to start piling up the savings.” According to a Government Accountability Office (GAO) analysis, fraudulent Medicare claims robbed the American taxpayer of $48 billion in 2010. Apply that study over a 10 year period and Medicare fraud would account for half a trillion dollars of wasteful government spending.

We agree that eliminating waste, fraud and abuse is a logical starting point for reforming the Medicare system. Therefore, protecting identities and blocking false claims is crucial. To keep the identity of beneficiaries secure, we introduced the Medicare Common Access Card (CAC) Act of 2011, a bipartisan, bicameral bill to save taxpayers billions and secure seniors’ identity.

When Harry Truman was enrolled as the first Medicare beneficiary in 1965, it is unlikely that he could have predicted that the card presented to him by President Lyndon Johnson would remain largely unchanged 46 years later. Today, that same format remains in place and senior’s Medicare cards reflect their name, coverage type and social security number on the front.

Yes, you read that correctly, their social security number is on the front of the card. Seniors have been victimized by identity theft and the taxpayer continues to pay for those fraudulent charges. Shouldn’t we be verifying that Medicare is only being charged for the procedures that seniors have received?

The Medicare Common Access Card Act of 2011 seeks to replicate the smart card technology currently used by members of our armed services and applies it to the Medicare system. The Department of Defense has issued over 20 million of these secure smart cards to authenticate and verify users for access to military programs and facilities. To date, DoD reports not a single Common Access Card has been counterfeited. We believe that seniors should benefit from the same identity security as members of our military.

Under the smart card pilot program, social security numbers would be removed from the front of the Medicare card and instead maintained in a secure encrypted chip. Patients and medical service providers would present their secure Medicare cards at the point of service and use it to verify services received by placing into a reader, entering their PIN, and confirming the transaction. The secure transaction system would completely eliminate the current “pay and chase” practice that leads to billions in wasteful spending and identity fraud within Medicare.

As the Joint Select Committee on Deficit Reduction continues to look for $1.2 trillion in savings over the next 10 years, preventing the abuse of our Medicare system is a “must do,” with the potential to save tens of billions in fraudulent claims. The Common Access Card Act of 2011 has bipartisan, bicameral support and has been endorsed by the AARP and the SecureID Coalition.

This group is unified in the belief that maintaining the status quo in the Medicare system is unacceptable and unsustainable. We need a new direction for Medicare reform and we need look no further than our own military’s smart card for the answer.

Mark Kirk, a Republican from Illinois, sits on the Senate Special Committee on Aging. Ron Wyden, a Democrat from Oregon, sits on the Senate Finance Committee and the Special Committee on Aging.