Health Groups Vie for Red Flags Rule Exclusion

With less than six months before the Red Flags Rule is set to go into effect, four national organizations have requested the Federal Trade Commission (FTC) reconsider the inclusion of health professionals in the regulation.

The American Medical Association (AMA) has upheld its opinion that the FTC’s overly broad interpretation of the Fair and Accurate Credit Transactions Act of 2003 (FACT) led the commission to create a rule that oversteps its authority.

After learning the U.S. District Court for the District of Columbia ruled in favor of the American Bar Association’s case to exclude lawyers from the regulation, however, the AMA banded together with the American Dental Association (ADA), American Osteopathic Association (AOA) and American Veterinary Medical Association (AVMA) to compose a letter to the FTC, advocating the same exclusion for all health professionals.

“The court ruling sends a clear signal that the FTC needs to re-evaluate the broad application of the red flags rule,” said AMA President J. James Rohack, MD. “Our four organizations firmly believe that applying the rule to health professionals, but not to lawyers, would be unfair.”

In its ruling against the FTC, the court said that the application of the Red Flags Rule to attorneys “is both plainly erroneous and inconsistent with the purpose underlying enactment of the FACT Act.” The court also stated that the FTC “not only seeks to extend its regulatory power beyond that authorized by Congress,” but also “arbitrarily selects monthly invoice billing as the activity it seeks to regulate.”

“The burdens of complying with this rule outweigh the benefits,” said AVMA President Larry R. Corry, DVM. “The FTC’s interpretation of the FACT Act should be redefined to exclude health professionals.”

The FTC compliance deadline for creditors (including physicians who extend credit to patients through billing) and financial institutions to develop and implement an identity theft prevention program under the Red Flags Rule is June 1.

Learn more about the Red Flags Rule on the FTC website.

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3 Responses to “Health Groups Vie for Red Flags Rule Exclusion”

  1. bw sox says:

    What should happen if the Ref Flags Rules are imposed on healthcare professionals:

  2. bw sox says:

    What should happen if the Red Flags Rule is imposed on healthcare professionals?
    -Terminate all forms of credit when treating patients, which means: termination of all network provider agreements (which means employer groups and their employees will not be able to find a physician in their network; therefore, the networks will become obsolete;
    -All patients pay at check-in (so we can be sure to meet the “no credit” rule);
    -Turn all patients away? without treatment (no matter the reason for their visit, very sick visit or well visit) if they can’t pay at time of service?;
    -Does all of this sound ridiculous? This, and worse, may be wehata we are coming to if the government doesn’t stop coming up with these unnecessary and meaningless rules. We are healthcare providers, not lending companies.

  3. ajb says:

    what are practices doing about patient’s medical Insurance cards being copied and then scan for electronic medical records. Patient’s are not wanting to give for the copy and then the billers do not have the actual card copy for very pertinent information on the cards. It is a waste of billing time to have to check elig for every single encounter in the front office and then at the billing company. ugh.

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