Medical Identity Theft Lawsuits | Protecting Patient Data & Legal Rights

Medical identity theft is one of the fastest-growing forms of cybercrime. Unlike traditional identity theft, which often focuses on stealing credit card or banking details, medical identity theft involves the fraudulent use of someone’s personal and health information to obtain medical services, prescriptions, or insurance benefits. In recent years, massive healthcare data breaches and cyberattacks have put millions of patients at risk, leading to a surge in medical identity theft lawsuits.

Victims are left not only with financial burdens but also with damaged medical records, compromised privacy, and life-threatening risks if false information is added to their health files. As courts and regulators grapple with the dangers of data misuse in healthcare, more patients are turning to legal action to hold negligent organizations accountable.

What Is Medical Identity Theft?

Medical identity theft can occur when a hacker steals or uses personal information (names, Social Security numbers, or health insurance numbers) to submit fraudulent claims. Medical identity theft can not only result in huge medical costs but can disrupt your own medical care.

Medical identity theft occurs when criminals use another person’s personally identifiable information (PII) or protected health information (PHI) to:

• Obtain medical care or procedures.

• Fill fraudulent prescriptions.

• Submit false insurance claims.

• Gain access to expensive medical equipment.

Following data theft incidents that are made public or come as an awful surprise, victims are suddenly faced with serious consequences that may include financial fraud and identity theft. There is also a potentially devastating result of a personal data breach that is often overlooked, and which is increasingly common: medical identity theft.

Medical identity theft can be very costly. A majority of victims pay an average of $13,500 to resolve instances of medical fraud, and many pay much more. When identity theft targets insurance providers or government programs, the costs are seen in higher insurance costs and increased taxes.

Joe Lyon investigates consumer data privacy cases for plaintiffs nationwide. After any data theft event, it is critical to take immediate action, and sometimes legal action is necessary to recover substantial damages.

The Dangers for Victims

Medical identity theft has unique and severe consequences which may include the following:

1. Compromised Medical Records: Fraudulent treatments and diagnoses may be added to a victim’s file, leading to dangerous mistakes in future care.

2. Financial Liability: Victims may face medical bills or insurance denials for services they never received.

3. Privacy Invasion: Sensitive health information may be exposed, causing embarrassment or discrimination.

4. Insurance Fraud: False claims can exhaust coverage limits, leaving victims unable to access legitimate care.

5. Emotional Distress: Victims often feel powerless as their most intimate health details are used for profit.

These risks highlight why medical identity theft is particularly insidious — and why victims often turn to lawsuits to seek accountability and compensation.

Cybercriminals can easily use personally identifiable information (PII), personal health information, healthcare data and prescription history to commit fraud. In many cases of medical identity theft, fraudulent insurance claims are submitted for services that were never provided for you, but for someone else.

In recent years, medical data was kept in paper file systems, but now have almost all been converted into electronic health records, stored on medical data networks or third-party cloud systems. Because of the vast amount of electronic data stored on different devices and networks, it’s much harder to protect.

Large-scale healthcare data breaches have been on the rise over the last five years, including a major hack of Anthem when about 70 million of its personal records were reportedly stolen.

How Does Medical Identity Theft Occur?

With merely the information taken from a misplaced wallet, a thief can commit medical identity fraud. More often, however, the personal data is stolen from healthcare entities’ networks and sold on the dark web, endangering millions of Americans each year.

Aside from basic ways to protect your medical information, it is prudent to look out for signs that someone is using your medical information. Some obvious medical identity theft red flags include:

• Getting a bill from a doctor or hospital for services you didn’t get
• Billing errors or errors in your Explanation of Benefits statement
• Bills for prescription medications you don’t take
• Any calls from debt collectors about a mysterious medical debt
• Medical debt collection notices that you don’t recognize on a credit report
• Notices from health insurance companies saying you reached your benefit limit
• A denial of insurance coverage because your medical records show a pre-existing condition you don’t have.

Recent Medical Identity Theft Lawsuits and Settlements

Over the past decade, medical identity theft litigation has gained momentum as courts recognize the lasting harm caused by healthcare data misuse. Notable cases include:

• Anthem Data Breach Litigation: Following a massive breach impacting nearly 80 million patients, Anthem faced class actions alleging inadequate data security that facilitated identity theft and fraud. The case led to a record-breaking $115 million settlement.

• Community Health Systems Breach: A cyberattack exposing patient data led to lawsuits arguing that the hospital system failed to safeguard PHI as required by HIPAA and state privacy laws.

• Premera Blue Cross Settlement: After hackers accessed the medical records of 11 million members, lawsuits claimed the company ignored security vulnerabilities. The case resulted in a multimillion-dollar settlement for victims.

These lawsuits demonstrate that when healthcare providers, insurers, or business associates fail to protect sensitive data, they may be held legally liable for the costs and consequences of medical identity theft.

Health industry experts say certain individuals are more likely to become targets, including people on Medicare and the elderly. Older adults are more susceptible to scams because they tend to be less guarded about disclosing personal health information. Children’s health records are also valuable because a minor’s clean credit report can be used when no one is checking credit reports.

New mothers, surgery patients, and people with chronic conditions like cancer are also at higher risk because of an increased activity within the healthcare system, and the more opportunity for medical records to be breached.

Anyone who posts personal information on social media are at higher risk. The more information available online, the more an individual may be targeted.

Steps Victims Can Take

The good news is that there are certain things you can do to protect your medical information. First, individuals can keep medical records, health insurance records, and other related documents in a secure place. Personal health information can include the following:

• Health insurance enrollment forms
• Health insurance cards
• Prescriptions
• Prescription bottles
• Billing statements
• Explanation of Benefits statements
• DNA testing results

When medical documents are no longer needed, they should be disposed of. In the case of paper forms, they should be shredded. Electronic data should be destroyed as well. Any medical statements sent to you in the mail should be carefully handled, and individuals should consider changing to an online account for medical bills or Explanation of Benefits statements. At all costs, protect your Social Security number, which can be used to commit fraud quite easily.

It is important to not give your medical information to anyone who calls, emails, or texts you unexpectedly. Ask anyone inquiring about your data for more information and find a company phone number to reach them at a later time.

Why You Should Hire The Lyon Firm

If you suspect someone of using your personal health information for devious purposes, contact a lawyer. Victims should submit a claim to their insurance provider, contact their financial institutions and credit agency. If you confirm medical identity theft, victims should contact an attorney and begin with collecting and reviewing medical records, and reporting errors. Contact doctors, clinics, hospitals, pharmacies, laboratories, and health insurance companies where the thief may have used your information.

Your health care provider must respond to a medical record request within 30 days and must notify other health care providers who may have the same errors in their records.

The Lyon Firm has extensive experience handling data breach, medical privacy, and identity theft lawsuits. With a proven track record in class actions and consumer protection litigation, the firm aggressively advocates for patients whose sensitive information has been compromised.

By holding negligent healthcare providers and data brokers accountable, The Lyon Firm not only helps victims recover compensation but also drives systemic change in how organizations protect patient data. If you have been impacted by a medical identity theft incident, working with a skilled legal team can make all the difference in restoring your financial security and protecting your future healthcare.

The Lyon Firm is currently involved in a variety of class action data breach litigation, representing plaintiffs nationwide. If you suspect medical identity theft or personal data theft, contact Joe Lyon for a free and confidential case review. Companies may be held accountable for their negligence and compensation may be available.