Bill Exempts Small Practices From Red Flags Rule

Small physician and accounting practices are exempt from the Federal Trade Commission's (FTC's) " red flags rule " under legislation the U.S. House of Representatives passed on Oct. 20. HR 3763 by U.S. Rep. John Adler (D-N.J.) amends the Fair Credit Reporting Act to exclude physician and accounting practices with 20 or fewer employees from the FTC's definition of a creditor.   

The bill went to the Senate Committee on Banking, Housing, and Urban Affairs after House passage. The Senate had not voted on the bill as this issue of Action was being prepared. The original FTC rule is scheduled to take effect Nov. 1, unless the Senate approves the House bill and President Obama signs it.

TMA's Red Flags Rule Webinar will answer physicians' questions about the rule.

The original rule defines physicians who regularly bill their patients for services (including billing for copayments and coinsurance) as creditors. The FTC thus requires them to develop and implement written identity theft prevention programs for their practices. Such programs must identify and respond to patterns, practices, or specific activities known as "red flags" that could indicate identity theft.

Earlier this year, the FTC delayed the rule after TMA, the American Medical Association, and 25 other medical societies told the agency that they believe physicians should not be subject to the rules because they are not creditors.

 

Action , Nov. 2, 2009

Last Updated On

May 30, 2019

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