June 3 , 2010 by: ASRM Office of Public Affairs Orginally published in ASRM Bulletin Volume 12, Number 20
The Red Flags Rule requires creditors (entities that provide goods or services for which they receive payment at a later time) who maintain covered accounts (accounts maintained primarily for personal, family or household purposes that allow multiple payments or transactions or for which there is a reasonably foreseeable risk of identity theft) to institute written identity theft prevention programs. The FTC maintains that health care providers who provide services for patients and defer payment for such services through payment plans or billing insurance companies are creditors under the rule.
The enforcement delay was granted at the request of several members of Congress to allow time for the consideration of legislation which would exempt physicians’, attorneys’ and accountants’ offices with fewer than 20 employees from the rule. The FTC has stated, however, that if the legislation is passed with an effective date earlier than December 31 enforcement of the rules for non-exempt entities will begin as soon as the legislation is effective.
The American Medical Association, has consistently opposed the inclusion of physicians in the definition of “creditors,” and filed suit, joined by the American Osteopathic Association and the Medical Society of the District of Columbia, in the US District Court for the District of Columbia asking the court to find the Red Flags Rule unlawful as applied to physicians.
The FTC has materials on its website to aid entities in determining whether they are covered by the Red Flags Rule and how they may comply, if covered. See www.ftc.gov/redflagsrule. AMA has also published Red Flags guidance materials on its website, http://www.ama-assn.org/ama/no-index/physician-resources/red-flags-rule.shtml.
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