Smart Card Alliance Response to GAO Report on Electronically Readable Cards Recommends System-wide Smart Card-based Strong Authentication for CMS

Princeton Junction, N.J., September 23, 2015 – In a response to the U.S. Government Accounting Office (GAO) report “Medicare: Potential Uses of Electronically Readable Cards for Beneficiaries and Providers,” the Smart Card Alliance recommends the system-wide implementation of smart card-based strong authentication for Medicare beneficiaries and providers to prevent fraud, maintain record accuracy and security and reduce medical errors.

The GAO’s report, issued in March 2015, details the current issues that the Centers for Medicare and Medicaid Services (CMS) faces regarding beneficiary and provider identification, security standards and financial losses due to fraud, and reviews the ways that electronically readable cards could address these challenges.

“Smart card technology has been proven to protect identities and privacy globally in many industries including healthcare for improving administrative and payment processes,” said Randy Vanderhoof, the executive director of the Smart Card Alliance. “In order to combat the upwards of 60 billion dollars per year lost in Medicare fraud and address other challenges that CMS faces, the Smart Card Alliance firmly believes that paper cards should be replaced with electronically readable cards. Further, the Alliance sees smart card technology as the best choice to provide the secure, interoperable, user-accepted and easy-to-use solution that CMS needs.”

The Smart Card Alliance endorses the GAO’s findings in the report that electronically readable cards could provide substantially more rigorous authentication, reduce reimbursement errors, and improve medical record-keeping for Medicare. Regarding the type of electronically readable cards, the Smart Card Alliance agrees with the GAO’s analysis that “found smart cards could provide substantially more rigorous authentication of the identities of Medicare beneficiaries and providers than magnetic stripe or bar code cards… because they are difficult to counterfeit or copy.”

According to the Alliance, implementing strong authentication with smart cards can lay a foundation to prevent Medicare fraud by authenticating the beneficiary identity at the point of care, carrying that authentication through the entire claim transaction chain, and providing the foundation for system-wide data integrity. In addition, healthcare providers in the U.S. are currently putting in place smart card-enabled payment terminals to accept credit and debit cards. These same payment terminals can be enabled to accept smart card-based Medicare cards and support secure transactions for healthcare.

The Smart Card Alliance also believes that smart cards can provide additional benefits that are not considered in the GAO report, including additional fraud reduction by strongly authenticating providers, enabling a more efficient way to manage claims processing. These benefits can be achieved affordably by upgrading the Medicare identity infrastructure using standards used today by the federal government.

To read the full response, “The Benefits of Strong Authentication for the Center for Medicare and Medicaid Services,” from the Smart Card Alliance’s Health and Human Services Council, visit

For more healthcare resources from the Smart Card Alliance, visit

About the Smart Card Alliance
The Smart Card Alliance is a not-for-profit, multi-industry association working to stimulate the understanding, adoption, use and widespread application of smart card technology.

Through specific projects such as education programs, market research, advocacy, industry relations and open forums, the Alliance keeps its members connected to industry leaders and innovative thought. The Alliance is the single industry voice for smart cards, leading industry discussion on the impact and value of smart cards in the U.S. and Latin America. For more information please visit

Megan Shamas
Montner Tech PR