Red Flag Rules: What you need to do beginning August 1, 2009
The Federal Trade Commission (FTC) just voted to delay implementation of the Red Flags Rule until August 1, 2009.  The  VMS, AMA  and other physician groups will utilize this time to convince the FTC and Congress that physicians are not "creditors" and therefore should not be subject to this rule.

The Federal Trade Commission will delay enforcement of the new “Red Flags Rule” until August 1, 2009, to give creditors and financial institutions more time to develop and implement written identity theft prevention programs. For entities that have a low risk of identity theft, such as businesses that know their customers personally, the Commission will soon release a template to help them comply with the law. Today’s announcement does not affect other federal agencies’ enforcement of the original November 1, 2008 compliance deadline for institutions subject to their oversight.

In November 2007, the Federal Trade Commission (FTC) issued a set of regulations, known as the “Red Flags Rule,” requiring that certain entities develop and implement written identity theft prevention and detection programs to protect consumers from identity theft. In response to FTC staff indications that the rule applies to physician practices, the American Medical Association (AMA) expressed its concerns and successfully delayed implementation of the rule until August 1, 2009.

The FTC continues to assert that physicians who regularly bill their patients (including co-payments and coinsurance) are considered creditors and so must develop and implement written identity theft prevention and detection programs for their practices by August 1, 2009, in order to be in compliance with the FTC’s Red Flags. AMA strongly disagrees with the FTC’s broad interpretation of the term “creditor” and last February was joined by VMS and nearly 100 other national and state organizations in sending a letter to FTC Chairman William Kovacic objecting to the interpretation.  AMA is continuing its efforts to delay the compliance deadline and to get FTC to re-publish the rule so that medicine will have an opportunity to explain why it is not applicable to physicians. 

Red Flags Rule Guidance Material Available for Physicians  
In the interim, AMA has developed guidance material to help physicians comply with the Red Flags Rule, which can be accessed on AMA’s website at http://www.ama-assn.org/ama/no-index/physician-resources/red-flags-rule.shtml (portions require AMA member username and password to access).

In coordination with AMA, VMS will continue to keep its members apprised of developments with the FTC.

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