Physicians Not Creditors, Congress Says
- By admin aapc
- In Billing
- December 10, 2010
- Comments Off on Physicians Not Creditors, Congress Says
The U.S. House of Representatives passed without objection, Dec. 7, the Red Flag Program Clarification Act of 2010 (S.3987). This legislation limits the type of creditors that must comply with the often-delayed Red Flags Rule. The Senate unanimously passed the bill on Nov. 30. Under the bill, physicians are no longer considered creditors and are exempt from the Red Flags Rule requirements.
“We’re pleased Congress clarified its law, which was clearly overbroad,” Federal Trade Commission (FTC) Chairman Jon Leibowitz said in a Dec. 8 statement.
The Red Flags Rule, scheduled to take effect Jan. 1, 2011, requires many businesses and organizations to implement a written Identity Theft Prevention Program designed to detect the warning signs — or “red flags” — of identity theft in their day-to-day operations. The way the rule was written, physicians who did not require payment in full at the time of service would be considered creditors and would have to comply with the rule.
This inclusion in the rule did not bode well with the health care industry. The American Medical Association (AMA) and other physician groups filed a lawsuit to get the FTC to permanently remove physicians from the scope of the Red Flags Rule.
At the request of several members of Congress, the FTC further delayed enforcement of the Red Flags Rule through Dec. 31, while Congress considered legislation that would affect the scope of entities covered by the rule.
The Red Flag Program Clarification Act of 2010 amends the Fair Credit Reporting Act to exclude from the definition of creditor “any creditor that advances funds on behalf of a person for expenses incidental to a service the creditor provides to that person.”
President Obama is expected to sign the bill before the Jan. 1, 2011 deadline.
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