Language Could Exempt Physicians From Identity Theft 'Red Flags' Rule

December 08, 2010 03:40 pm Sheri Porter

Congress has voted on new language that effectively could exempt physicians from the Federal Trade Commission's antifraud identity theft regulation known as the "Red Flags" Rule. The Senate passed S. 3987, the Red Flag Program Clarification Act of 2010(www.gpo.gov), on Nov. 30, and the House gave the go-ahead by voice vote on Dec. 7.

President Obama is expected to sign the legislation before the Jan. 1 compliance deadline.

The Red Flags Rule, which was drafted in 2008 in connection with the implementation of the Fair and Accurate Credit Transactions Act of 2003, requires financial institutions and creditors, including physician practices, to address the risk of identity theft by implementing identity theft prevention programs.

The Academy had long argued that the rule was an outgrowth of identity theft problems associated with financial institutions and credit card companies and was never intended to include America's physicians. Furthermore, the AAFP maintained that enforcement of the rule would unfairly burden physicians, particularly those working in small and solo practices.

"I am very pleased that the House responded to the Academy's concerns and voted to join the Senate in modifying the Red Flags Rule," said AAFP President Roland Goertz, M.D., M.B.A., of Waco, Texas, in an interview with AAFP News Now. "We are committed to providing the best possible care to our patients, and that includes pushing back when unfair regulations diminish the financial resources of physician practices."

The AAFP helped write a Dec. 6 letter to House Speaker Nancy Pelosi, D-Calif., and House Minority Leader John Boehner, R-Ohio, that urged the House to approve S. 3987 before Congress adjourned for the year.

According to that letter, the Red Flags Rule defines creditors "as any person that sells a product or service for which the consumer can pay later."

"This definition expanded previously accepted definitions and created concern for our organizations," says the letter. "We urge the House to take immediate action to approve this important legislation, facilitating its enactment into law prior to the Dec. 31 deadline." The letter was signed by the AAFP and 26 other national medical and dental associations, including the American Osteopathic Association, the AMA, the American College of Physicians and the National Dental Association.

The Red Flags Rule went into effect on Jan. 1, 2008, but enforcement of the rule was delayed at least five times in an attempt to give entities affected by the rule time to comply. In August of this year, the AAFP joined a group of 26 medical associations that asked to be added as plaintiffs in an existing court case that argued the rule should not apply to physicians.

Congressional action to amend the Red Flags Rule also could give exemptions to other professional groups, including lawyers, accountants, pharmacists, veterinarians, nurse practitioners and social workers.


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