Smart Card Alliance Response to GAO Report on Electronically Readable Cards Recommends System-wide Smart Card-based Strong Authentication for CMS

In a response to the U.S. Government Accounting Office (GAO) report “Medicare: Potential Uses of Electronically Readable Cards for Beneficiaries and Providers,” the Smart Card Alliance recommends the system-wide implementation of smart card-based strong authentication for Medicare beneficiaries and providers to prevent fraud, maintain record accuracy and security and reduce medical errors.

The GAO’s report, issued in March 2015, details the current issues that the Centers for Medicare and Medicaid Services (CMS) faces regarding beneficiary and provider identification, security standards and financial losses due to fraud, and reviews the ways that electronically readable cards could address these challenges.

“Smart card technology has been proven to protect identities and privacy globally in many industries including healthcare for improving administrative and payment processes,” said Randy Vanderhoof, the executive director of the Smart Card Alliance. “In order to combat the upwards of 60 billion dollars per year lost in Medicare fraud and address other challenges that CMS faces, the Smart Card Alliance firmly believes that paper cards should be replaced with electronically readable cards. Further, the Alliance sees smart card technology as the best choice to provide the secure, interoperable, user-accepted and easy-to-use solution that CMS needs.”

The Smart Card Alliance endorses the GAO’s findings in the report that electronically readable cards could provide substantially more rigorous authentication, reduce reimbursement errors, and improve medical record-keeping for Medicare. Regarding the type of electronically readable cards, the Smart Card Alliance agrees with the GAO’s analysis that “found smart cards could provide substantially more rigorous authentication of the identities of Medicare beneficiaries and providers than magnetic stripe or bar code cards… because they are difficult to counterfeit or copy.”