GAO: Switching to Electronic Medicare Cards Could Reduce Fraud

April 27, 2015 in News

Replacing paper Medicare cards with electronically readable cards could reduce Medicare fraud, according to a recent Government Accountability Office report, Health Data Management reports.

Details of Report

According to the report, electronic cards could reduce fraud by enabling:

  • Authentication of beneficiaries’ and providers’ identities at the point of care;
  • Conveyance of beneficiaries’ identities electronically;
  • Electronic sharing of insurance information to providers; and
  • Electronic exchange of medical information.

The authors wrote that “smart cards could provide substantially more rigorous authentication than cards with magnetic stripes or bar codes, and provide greater security and storage capacity for exchanging medical information.”

Further, GAO wrote that the electronic cards “could reduce reimbursement errors and improve medical record-keeping.”


However, the report noted that there are several challenges to adopting an electronic card system (Slabodkin, Health Data Management, 4/27). For a system to authenticate beneficiary and provider identity, CMS likely would have to update its:

  • Card management process; and
  • Claims processing system (GAO report, March 2015).

In addition, Medicare providers could face costs and challenges to updating their system, according to the report.

GAO noted that adopting electronically readable cards in the U.S. health care system in the past has been limited by industry and provider reluctance to invest in the necessary technology.

Meanwhile, the report noted that efforts to switch to electronic cards in France and Germany produced cost savings, but it is unclear whether such results “would be achievable for Medicare since the savings resulted from using the cards to implement electronic billing, which Medicare already uses” (Health Data Management, 4/27).

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