December 21, 2010
Your Academy, along with 25 other medical specialty societies, recently filed a motion to intervene in a case challenging the application of the Federal Trade Commission’s Red Flags Rule against physicians. The Red Flags Rule (S. 3987) requires certain entities, including physician practices, to develop and implement procedures to protect consumers against identity theft.
The case challenging application of the rule was filed by the American Medical Association (AMA) and American Osteopathic Association (AOA). A multi-society motion to intervene in the case was necessary because AMA and AOA sought relief only for their members and not all physicians. Furthermore, the Federal Trade Commission entered into a stipulation with AMA and AOA to delay enforcement of the Red Flags Rule against AMA and AOA members while a challenge to the rule by the American Bar Association (ABA) is still pending. The ABA case, which was argued in the US Court of Appeals for the District of Columbia on November 15, 2010, also does not apply to all physicians. A final decision on the ABA case is not expected until sometime in first quarter of 2011 or later.
UPDATE: On December 21, the Academy’s legal counsel received a letter from FTC. FTC agreed to delay enforcement of the Red Flags Rule against all physicians for at least 90 days after the ABA case is decided.
In addition to this official reprieve, this letter from FTC suggests the agency does not believe that the recent amendment to the Red Flags Rule automatically excludes all physicians from the rule. While the language of the amendment limits the definition of “creditors” subject to the rule in a way that likely excludes most physicians, there may be some practices that would still qualify as creditors under the new definition.
Your Academy will provide more information once further decisions are made in the ABA and AMA cases.
Click here for a description of the Red Flags Rule.
Click here to learn about recent legislation enacted on the Red Flags Rule.