From AAHomecare - June 2, 2010

Red Flags Rule Is Postponed Again – Until December 31, 2010  

Last week, the Federal Trade Commission (FTC) said it will again postpone enforcement of the Red Flags Identity Theft Prevention Rule from June 1 until the end of the year, December 31, 2010. The rule has generated concern in Congress and among medical provider groups.

The Red Flags Rule is an anti-fraud regulation requiring “creditors” and “financial institutions” with covered accounts to implement programs to identify, detect, and respond to the warning signs, or “red flags,” that could indicate identity theft. The rule was originally set to be implemented on August 1, 2009 but has been delayed several times.

Fair and Accurate Credit Transactions Act of 2003 (FACTA) defines a “creditor” as any entity that regularly extends or renews credit or arranges for others to do so and includes all entities that regularly permit deferred payments for goods or services. HME providers along with other healthcare professionals who collect patient information for purposes of billing, copayments, and deductibles are considered “creditors” under the rule.

In a statement, the FTC said it urges Congress to “act quickly to pass legislation that will resolve any questions as to which entities are covered by the Rule and obviate the need for further enforcement delays.” The American Medical Association and other physicians’ groups filed a lawsuit to block the rule, arguing that “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.”
 

From VGM - May 25, 2010

Red Flag Rules Effective June 1; AMA and Others File Suit Against FTC
Commentary by VGM, Article Provided by Information Law Group
Red Flags Rules are scheduled to go effective June 1, 2010. At that point, all “creditors” are required to have programs in place to combat identity theft. As regulation currently stands, DME providers qualify as creditors any time they do not require payment up front for delivered products or services.

The American Medical Association, American Osteopathic Association, and Medical Society for the District of Columbia have filed suit against the FTC, contending that medical professionals do not and should not qualify as creditors, that defining medical professionals as creditors would devastate the current patient-provider relationship, and that the rules are being implemented without due rulemaking procedure.

While the lawsuit does not directly impact DME providers, a precedent is to be set for medical professionals through its impending outcome.

In the meantime, VGM advises all providers to be in compliance with Red Flags Rules by the June 1, 2010.

CLICK HERE for a sample Red Flags Identity Theft Prevention Program.

CLICK HERE for the article provided by Information Law Group.