Fintech Insights

Can Your Systems Handle the Medicare Beneficiary Identifier?

July 11, 2018

In the ongoing fight against health insurance fraud, a new randomly generated Medicare Beneficiary Identifier (MBI) has replaced the Health Insurance Claim Number (HICN) on Medicare cards for more than 5.7 million Americans. With the rollout underway since April, this initiative is a great way to protect consumers from identify theft and health plans from fraudulent claims. But it’s also putting insurers under pressure to make some pretty intricate changes to their systems.

No payer will argue with the logic of replacing the HICN, which basically replicates the Medicare customer’s Social Security Number (SSN) followed by the letter A. With SSNs tied so closely to consumers’ digital footprint, the potential for identify theft has been huge. So, taking the number off the Medicare card, and putting a unique identifier in its place, can only help stem the tide of fraudulent activity.

Medicare fraud alone already costs U.S. health insurers $60 billion a year and rising in reported losses. And despite a concentrated effort since 2007, dedicated strike force teams currently thwart only around $2.5 billion worth of crimes a year for Medicare. The consumers most at risk of identity theft are people aged 65 or older.

For insurance companies in general, cybersecurity risk is an all-consuming problem. Thirty-six percent of insurers cite it as their biggest barrier to digital innovation – and 20 percent see it as the most significant threat to growth. That makes the MBI a solid step in the right direction; the question is, have your systems kept up?

According to the Medicare Access and CHIP Reauthorization Act (MACRA) regulation, SSNs/HICNs will be removed from all Medicare cards by April 2019 and replaced with the MBI for transactions such as billing, eligibility status and claim status. By now, health plan systems should be ready to consume and search for the MBI’s 11-character alphanumeric format, which in turn may require you to extend tables, rewrite process and filtering rules, rework table lookup logic, add new character sets and be able to check for valid document formats. And until next April at least, your systems will need to accept both the MBI and HICN as identifiers of Medicare customers.

The good news is that you don’t have to manage these modifications alone. If your technology is struggling to cope, FIS – along with other leading system providers – can help make the required changes, with professional services teams on standby to adapt and test systems.

Like the HICN before it, the distinguishing number of the MBI will play a central role in managing benefits and processing claims, while also helping crack down on crime. Put technology to work to support the switch to this new identifier – and it will help keep your customers safer for years to come.