Lawmakers’ renewed interest in fighting medical identity theft has one group calling for an end to the ACA’s cap on fraud-prevention programs.

Members of the Senate Health, Education, Labor and Pensions (HELP) Committee aren’t satisfied with the HHS’s current plan for helping victims of medical identity theft and are mulling ways to improve federal fraud-fighting efforts, an aide for the committee’s Republican majority told me recently.

The federal government could bolster private sector efforts to combat medical identity theft by removing fraud spending from insurers’ medical loss ratio calculation, Ann Patterson, senior vice president and program director for the Medical Identity Fraud Alliance, said. This provision of the Affordable Care Act has prevented health plans from expanding their fraud prevention programs even as data breaches increasingly become an issue for the industry, she said.

“The government has a role to play in incentivizing private industry to do the right things,” Patterson said.

The ACA requires insurers to submit data to the HHS on the proportion of premium revenues they spend on clinical services and quality improvement compared with other spending such as administrative overhead, which includes fraud prevention programs. Insurers must spend at least 80 percent of the money they receive from premiums on clinical care.

However, Patterson said, fraud can interfere with clinical care, causing misdiagnoses and delays in care, and therefore should be considered a contribution to clinical care under medical loss ratio requirements, an argument insurers tried unsuccessfully to make when the ACA was first passed.

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February 2, 2016 By Alex Ruoff, Bloomberg BNA