Doc Groups Sue Over Red Flags Rule

May 21, 2010

Physician associations filed a lawsuit in federal court in Washington today seeking to block the Red Flags identity theft rule from being imposed on doctors.

Physician associations filed a lawsuit in federal court in Washington today seeking to block the Red Flags identity theft rule from being imposed on doctors, Modern Healthcare reports.

The lawsuit, filed by the AMA, American Osteopathic Association, and the Medical Society of the District of Columbia, seeks

to prevent

physicians as being defined as “creditors” when they do not require full payment at the time of care. The groups don’t think practices should be under the same regulations as banks and credit card companies. The Federal Trade Commission’s

Red Flags rule

requires lenders to implement a policy for preventing and detecting identity theft. The regulation was to take effect in June, after being pushed back several times amid fierce opposition. Many practices have been working feverishly to ensure they have policies in place.
“In applying the Red Flags Rule to physicians who do not require payment in full at the time of providing care to patients, the FTC is exceeding its statutory authority and acting arbitrarily and capriciously,” according to the suit. The suit also sites a November 2009 decision that lawyers and law firms weren’t subject to the rule, because they were not considered creditors when they allow clients to defer payments, according to Modern Healthcare. Have you already implemented a Red Flags policy? Do you think practices should be exempt from the rule?