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Data breach in 2005 fueled a long-running massive Medicare fraud scheme

Posted on October 13, 2010 by Dissent

An indictment unveiled in New York today concerning a huge Medicare fraud scheme reveals how both medical professionals and patients may have their identities stolen in furtherance of fraud. And in this case, a data breach years ago provided much of the identity information needed.

William K. Rashbaum and Michael Wilson report:

An Armenian-American crime syndicate stole the identities of doctors and thousands of patients and used them and more than a hundred spurious clinics in 25 states to bill Medicare for more than $100 million for treatments no doctor ever performed and no patient ever received, the federal authorities announced on Wednesday.

Read more in the New York Times.   The FBI’s press release on the case can be found here and it identifies one of the sources of patient data as the Orange Regional Medical Center.

Reading through the indictment, I see it says that:

Among the [Medicare] beneficiaries whose identities were stolen and used by the Conspirators to defraud Medicare were numerous individuals living in the Southern District of New York who were patients ofOrange Regional Medical Center in Orange County, New York.

Elsewhere in the indictment, it says:

In or around 2005, the names and personal data of approximately 2,900 patients of an Orange County, New York medical facility were fraudulently obtained by a co-conspirator not named as a defendant herein.

It seems that the data from that 2005 breach started being used in  the Medicare fraud in 2006 and may have continued to be used up through the indictment in 2010, although there were other sources of patient data as well.

The revelations raise some questions in my mind:

  1. Was Orange Regional Medical Center (ORMC) aware of the breach in 2005?  How did it occur?  Neither my blogs, ITRC, PRC, or DataLossDB.org have any entry for a breach involving this medical center for 2005.
  2. If  ORMC was not aware of the breach at the time, when did they first become aware of it and how did they first become aware of it?
  3. Did ORMC ever notify the patients whose data were stolen in 2005 of the breach, and if so, when?

I’ve sent an inquiry to the medical center to try to obtain clarification on the 2005 breach and when, if ever, patients were notified about it.   I hope to have more on this tomorrow.

Cross-posted from PHIprivacy.net


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Category: Breach IncidentsHealth DataID TheftOf NoteU.S.

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