Physicians could be exempt from Red Flags Rule
HIPAA Weekly Advisor, December 13, 2010
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The Senate and House have each passed a bill that changes the Red Flags Rule’s definition of “creditor” and relieves physicians of complying with the Federal Trade Commission’s identity theft prevention law.
The House passed the bill—”Red Flag Program Clarification Act of 2010″— December 7, less than a week after the Senate approved the bill.
The enforcement date for the rule is December 31. The FTC said earlier this year on its website that it delayed enforcement at the request of Congress as it “considers legislation that would affect the scope of entities covered by the rule.” The compliance date was November 1, 2008.
And now, that very legislation passed this week and only awaits a signature from President Obama before becoming law.
The bill calls for changes to the FTC’s definition of “creditor.” Smaller entities such as physician practices and physician offices have long argued that they should be exempt from complying. Some have filed lawsuits.
Representative John Adler, D-NJ, said in the House debate Tuesday that the purpose of the Red Flag Program Clarification Act “is to limit the type of creditor that must be covered by the FTC’s Red Flags Rule.”
“When I think of the word ‘creditor,’ dentists, accounting firms, and law firms do not come to mind,” Adler said.
However, he said, the Red Flags Rule as written now requires these types of professions and others to comply.
The FTC “broadly interpreted” creditors to include any business that allows clients to establish a payment plan in exchange for their services rendered, said Rep Paul Broun, R-GA, in his Congressional testimony. This swept in “many businesses that do not operate as a creditor in the general understanding of the term, such as dentists, doctors, veterinarians, lawyers, accountants, and many other healthcare providers that offer their clients payment plans.”
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