The AMA and others filed a lawsuit to stop enforcement
Regardless of a recent lawsuit filed by the AMA, you should be prepared to comply with the Federal Trade Commission’s (FTC) Red Flags Rule now in effect.
The rule is intended to be an anti-fraud effort requiring “creditors” and “financial institutions” to implement programs to identify, detect and respond to “red flags” that might point to cases of identity theft.
The FTC has clearly stated it considers physicians to be creditors if they bill patients after delivering services for amounts not paid by insurance plans or if they set up payment plans for patients.
However, on May 21, 2010, the AMA, the American Osteopathic Association and the Medical Society of the District of Columbia filed a federal lawsuit attempting to block the FTC from extending identity theft regulations to physicians. The medical organizations charge that the FTC’s rule exceeds the powers delegated to it by Congress and that the rule’s application to physicians is “arbitrary, capricious and contrary to the law.”
“This unjustified federal regulation of medicine treats physician practices like banks, credit card companies and mortgage lenders,” said AMA President-elect Cecil B. Wilson, M.D. “The extensive bureaucratic burden of complying with the Red Flags Rule outweighs any benefit to the public.”
For two years, the AMA has urged the FTC and Congress not to include physicians as creditors in the rule but their appeal was not heard.
To find out if your office meets the requirements, go to the ISMA Red Flags rule page.