The Centers for Medicare and Medicaid Services has not yet committed to a program to remove the Social Security number from Medicare cards, five years after the Office of Management and Budget ordered agencies to reduce unnecessary use and six years after CMS first explored options.

That’s the bottom line from the Government Accountability Office in a new report and testimony to Congress. GAO is a congressional watchdog agency. “Lack of action on this key initiative leaves Medicare beneficiaries exposed to the possibility of identity theft,” GAO officials testified to Congress.

More than 48 million Medicare cards have Social Security numbers on them, the GAO estimates, six years after CMS issued a report describing an option for removing the SSNs and estimating a cost of more than $300 million. CMS in November 2011 issued another report with three options, and price tags of $803 million to $845 million, with about two-thirds of the cost related to modifications to CMS and state Medicaid information systems. The Medicaid systems must be taken into account because some Medicare beneficiaries are enrolled in both programs.

For your consideration: Breach Affecting 9,558 includes Social Security Numbers

The GAO, however, takes considerable issue with the methods CMS used to estimate costs in the 2011 report. The agency did not use any cost-estimating guidance, including GAO’s; procedures used to develop I.T. cost estimates were questionable, based on old data and not well-documented; CMS asked for cost data from all states but only got information from five; GAO identified inconsistences in assumptions used to develop the estimates; and CMS did not take other factors into account such as possible efficiencies when combining technological modifications with related I.T. modernization initiatives. “The agency also did not attempt to calculate potential savings due to the reduced need to monitor compromised SSNs if they were removed from Medicare cards,” according to GAO testimony.

CMS, in response to the GAO report, agreed to select an approach for removing Social Security numbers that best protects beneficiaries from identity theft and minimizes burdens for beneficiaries and providers. It also agreed to conduct a new cost estimate with strengthened methodology.

The GAO report is available here and testimony here.

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