AMA and Others Challenge "Red Flags Rule"

On May 21, the American Medical Association (AMA), American Osteopathic Association (AOA), and the Medical Society for the District of Columbia (MSDC) filed a lawsuit against the Federal Trade Commission (FTC), challenging the FTC's definition of "creditors," under the "red flags rule," which currently includes licensed health care professionals because they usually defer payment for services until insurance reimbursement is received.

The "red flags rule" requires creditors to implement procedures to prevent and monitor identity theft by June 1. Application of this rule would require financial investment and changes in current policies and procedures. In January, health professional organizations sent a petition to the FTC, arguing for the removal of licensed health care professionals from the rule. The medical groups argue that the rule is intended to apply to banks, large creditors, and other groups, not to medical professionals.

Implementation of the rule has been delayed several times due to various challenges from other affected professions. The American Bar Association has already obtained a decision from the US District Court for the District of Columbia, stating that lawyers are exempt from the rule. Congress has also taken action, exempting small businesses. The current implementation date for the rule is June 1. In the meantime, the AMA will provide physicians with information on how to comply with the rule until a decision in the lawsuit is reached.


Source: BNA