Both the House and Senate have passed the Red Flag Program Clarification Act of 2010, which provides additional information on who is determined a "creditor" under the rules.
The rule clarifies the definition to state that a "creditor" does not include an entity that "advances funds on behalf of a person for expenses incidental to a service provided by the creditor to that person." This means that physicians and healthcare institutions are no longer held subject to the red flags rule.
The red flags rule would have required these entities to take precautionary measures to prevent identity theft. Groups such as the American Medical Association fought enforcement of the rule on healthcare providers, stating that the rule would be burdensome and redundant if enforced along with HIPAA protections.
The red flags rule is scheduled to go into effect on December 31, 2010.
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