Cedars-Sinai endures more patient identity theft, fraud

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More than 1,000 patients at Cedars-Sinai Medical Center in Los Angeles have had their personal information stolen by a former employee in the hospital's billing department, who allegedly used the identities to steal from insurance companies.

Edward Prunchunas, the hospital's chief financial officer, sent a warning letter to the affected patients, notifying them that their information had been found during a search of the home of a former employee, James Allen Wilson. He urged them to monitor their credit reports and to notify the district attorney's office if they noticed anything unusual.

Hospital officials said Allen, who last worked at Cedars-Sinai in March 2007, had legitimate access to the patients' records for billing purposes, but did not have permission to take identifying information home, reported the Los Angeles (LA) Times.

The scheme netted Wilson at least $69,000, said Jane Robison, a spokeswoman for the Los Angeles County district attorney's office. But she said the investigation is continuing, and the scope and scale of the alleged theft could grow, according to the LA Times.

Wilson was arrested Nov. 6, 2008 by the LA County Sheriff's Department. He pleaded not guilty to multiple felony charges, including identity theft, insurance fraud and grand theft. He remains in custody on $895,000 bail and is scheduled to be in court Jan. 22.  

Prosecutors told the hospital that Wilson set up a fake laboratory company. He allegedly used the names of actual workers' compensation beneficiaries to submit claims for services that were never performed at the fictitious lab, according to a hospital letter. The insurers sent payments by check to a post office box that Wilson set up, the letter said.

Hospital spokesman Richard Elbaum told the LA Times earlier this year that three or four workers are terminated annually for trying to peak at celebrity patients' records. There are also suspicions that someone at the hospital tipped the celebrity news website TMZ.com to a story on a medication error last year that nearly killed the infant twins of actor Dennis Quaid and his wife, although no one has been charged.

Cedars-Sinai officials said that although they continually reevaluate security procedures, and plan to use the latest breach as another opportunity to review the way the hospital monitors the conduct of employees who have access to patients' information.