FTC: Physicians Should be Exempt From Red Flags Rule

By admin aapc
In Billing
July 2, 2010
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The head of the Federal Trade Commission (FTC) now says physicians should not be included in the Red Flags Rule’s definition of a “creditor,” but it would take congressional action to exempt them.
“We agree with you that the Red Flags Rule reaches too far,” said FTC Chair Jon Leibowitz June 14 at the American Medical Association’s (AMA) 2010 Annual Meeting of the House of Delegates in Chicago.
However, wrote Leibowitz in an e-mail to American Medical News a few days later, “We do not have the authority to exempt any categories or professions of businesses from the rule.”

Several medical groups have contended all along that physicians should not be included in the rule, which requires all businesses offering credit to develop and implement written identify theft prevention and detection programs.
As it stands, the FTC will begin enforcing the Red Flags Rule Dec. 31. However, according to American Medical News, the FTC chair also said June 25 the agency would not enforce the rule against members of the AMA, the American Osteopathic Association (AOA), state medical societies and the Medical Society of the District of Columbia while litigation against the Red Flags Rule filed by the American Bar Association (ABA) is in appeals court.
The medical groups also filed a lawsuit which seeks to exempt physicians from the rule after news of the ABA successfully blocking implementation of the rule for legal offices.
Meanwhile, the Senate’s Committee on Banking, Housing, and Urban Affairs is considering a House-passed bill that would exempt certain small businesses, including medical practices, with 20 or fewer employees, according to American Medical News.
While all this sounds like physicians might not have to comply with the Red Flags Rule, your practice’s legal council may advise otherwise.
“Until the law or the regulations are changed, you are stuck with what they are,” said Peter McLaughlin, senior council with Foley & Lardner LLP in Boston. “… We don’t know if physicians will be fully exempt or partially exempt. It would be unwise to do nothing.”
Source: amednews.com