WASHINGTON – To combat a reported $60 billion lost to waste, fraud and abuse within the Medicare system, U.S. Senators Mark Kirk (R-IL), Ron Wyden (D-OR), Marco Rubio (R-FL) and U.S. Representatives Jim Gerlach (R-PA-06), Earl Blumenauer (D-OR-03) and John Shimkus (R-IL-19) introduced legislation today to use existing “smart card” technology to protect seniors.

Similar to the 20 million “Common Access Cards” issued by the Department of Defense, the new Medicare Common Access Card Act of 2011, S. 1551, would establish a pilot program to develop a secure Medicare card using smart card technology to protect seniors personal information, prevent fraud and speed payment to doctors and hospitals.  According to a Government Accountability Office report, fraudulent Medicare claims robbed taxpayers of $48 billion in 2010.

AARP and senior rights advocate, Wilfred Brimley, joined the bipartisan Members of Congress in announcing their support for the legislation.

“Building on the smart cards already issued to all Americans in uniform, we can offer seniors more protection for their identities while reducing fraud and waste in the strained Medicare system,” Senator Kirk said. “By removing a senior’s Social Security number from the front of the card and including the security upgrades used on the cards of our troops, this Secure Medicare Common Access Card will also help end Medicare’s current “Pay then Chase” policy that allows so much fraud and waste.  I am thankful to have the support of AARP and Wilfred Brimley who has been so active in promoting the health of seniors.”

“If you looked at the card carried by every Medicare beneficiary in America you would find their name and their full social security number there for all to see,” Wyden said. “In an age of identity theft, this is simply asking for trouble. The legislation will not only make the identity of America’s seniors more secure, it does so in a way that will ensure that Medicare is paying for the services that are actually being provided. Giving providers and insurers the tools to reliably weed out fraud will only help to improve the experience of dealing with providers and insurers for those acting in good faith. This is an approach that has proven to reduce fraud and abuse and is a common sense approach to safeguarding taxpayer spending.”

“I am proud to be a cosponsor of this bill which would take a step to eliminate the $60 billion of waste, fraud, and abuse in the Medicare program,” Senator Rubio said. “Medicare is already facing long-term challenges, so we need to protect seniors and prevent people from abusing the system. I am proud to be working with Senator Kirk on this critical issue.”

“Cutting fraud, waste and abuse is critical to strengthening Medicare and making sure seniors continue to have access to the care they need,” said U.SRep. Jim Gerlach (PA-6th District). “Taxpayers and seniors deserve the protection against identity theft and fraud that this legislation provides, and I look forward to working with my colleagues in the House and Senate to bring the Medicare card into the 21st Century.”

“Millions of beneficiaries depend on Medicare for their healthcare needs and depend on Congress to ensure the vitality of that program,” said Congressman Blumenauer. “This is a simple and elegant solution to save money and guard against fraud and I look forward to working with Health and Human Services, Medicare beneficiaries, and other stakeholders to ensure Medicare’s continued integrity.”

“Medicare wastes 60 billion dollars each year by making fraudulent payments,” said Congressman John Shimkus.  “It’s possible that we could save half of that just by updating the Medicare card and verifying the recipient’s identity, who the provider was, and the service that was provided.  This legislation will set up five test areas around the country, then we can determine whether it should be implemented nationwide.”

The Medicare Common Access Card Act of 2011 establishes a two-phase system for developing and implementing secure smart card technology for Medicare beneficiaries and providers based on the 20 million cards issued under the DoD program.

Phase one would require the Secretary of Health and Human Services (HHS) to design and implement a smart card pilot program in geographic regions considered to be at high programmatic risk in an effort to increase the quality of care, improve the accuracy in the Medicare billing system, reduce the potential for identity theft and prevent waste, fraud and abuse.

The second phase, expanded implementation, would occur one year after the start of the pilot program following a HHS report to Congress on the results of the pilot program and the viability of the nationwide expansion and implementation of Medicare Common Access Card technology.

The common access card technology would be used by both Medicare patients and health care providers at the point of service to verify identity and make secure billing transactions.  By creating an electronic record between the beneficiary and the provider, it ensures that services and equipment were not only provided but also received, signaling that it can then be paid for by CMS.  This type of technology is currently used by the Department of Defense (DoD), who have issued over 20 million of the secure ID cards.  To date, DoD reports not a single common access card has been counterfeited.

The Medicare Common Access Card (CAC) pilot program would be funded by transferring funds from the Medicare Improvement Fund (MIF).  The MIF was established by the Medicare Improvements for Patients and Providers Act (MIPPA) of 2008 to make funds available to HHS for the purpose of making improvements under the Medicare Parts A & B programs including program integrity improvements.

Following introduction, the Medicare Common Access Card Act of 2011 will be referred to the Senate Finance Committee.  The Congressional Super Committee, created in the July debt limit deal, is in a position to include a package to combat waste, fraud and abuse in the Medicare system in their report to Congress, due November 23.

With bipartisan, bicameral backing, the Members introducing the bill urge inclusion of the Medicare Common Access Card Act of 2011 pilot program in that report.

The Medicare Common Access Card Act of 2011 has been endorsed by the American Association of Retired Persons (AARP) and the SecureID Coalition.


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