Replacing SSNs on Medicare cards costly, says CMS

It would cost between $812 million and $845 million to remove social security numbers from Medicare cards, the Centers for Medicare and Medicaid Services says--an estimate the Government Accountability Office criticizes as potentially unreliable.

In written testimony (.pdf) submitted to the House Ways & Means Committee for an Aug. 1 hearing, CMS Chief Information Officer Tony Trenkle said the estimates come from a study completed in November 2011.

The agency examined three possibilities for removing social security numbers from the cards. The least expensive would involve keeping social security numbers as beneficiary identifiers, but truncating their appearance on the cards. The most expensive would issue a new "Medicare Beneficiary Identifier" to individuals and require its use in external transactions--CMS would continue to use social security numbers to process claims. The middle option would utilize MBIs as a public identifier, but permit medical practices to interface with CMS itself using social security numbers.

All three options would require substantial changes to information technology systems--according to a Government Accountability Office summary and critique (.pdf) of the CMS study, modifying state Medicaid IT and CMS IT systems would cost between $512 million and $514 million. The Social Security Administration, no matter the option, estimated it would have to undertake modification to IT systems worth $95 million.

"Any effort to remove SSNs from Medicare cards would be an administratively complex and costly undertaking," Trenkle wrote in his testimony.

The GAO says the methods and assumptions behind the CMS study "raise questions about their reliability," however. CMS didn't use cost-estimating guidance, and the estimates it used for the cost of changing its own systems were three times higher than a similar study conducted in 2006, and agency officials "could not explain how or why a number of these systems would be affected under the three options," the GAO says.

Cost that would be borne by states were based on cost data from only five states--Minnesota, Montana, Oklahoma, Rhode Island, and Texas--"and we were unable to determine whether these states are representative of the IT-system changes required by all states," the GAO adds.

In response to GAO criticism, SSA officials said they would conduct a new study.

For more:
- go to the hearing webpage (prepared testimonies but no webcast available)

Related Articles:
State health departments using Social Security numbers as identifiers, finds audit
Attention identity thieves: Tax notices still printed with social security numbers
Pentagon removes SSNs from military ID cards