Doctors Win Another Red Flags Reprieve

Case Involving Attorneys Could Lead to Further Delay
Doctors Win Another Red Flags Reprieve
The Federal Trade Commission has signed a court-approved agreement to hold off on enforcing the Identity Theft Red Flags Rule for physicians until at least 90 days after an appellate court rules on a case involving enforcement of the rule for attorneys.

Recently, the FTC delayed its enforcement of the rule in all sectors until Dec. 31, 2010, to give Congress time to decide whether to enact relevant legislation exempting certain groups. But the new court agreement has the potential to extend that date even further for physicians, depending on how long it takes for the appellate court to rule on the pending case regarding enforcement for attorneys.

Under the Red Flags Rule, which became effective Jan. 1, 2008, organizations that extend credit to their clients must develop and implement written identity theft prevention programs that help identify, detect and respond to patterns, practices or specific activities, known as "red flags," that could indicate identity theft.

Doctors' Lawsuit

Earlier this year, the American Medical Association and two other physician groups filed a lawsuit seeking to prevent the FTC from applying the rule to doctors.

In arguing against applying the rule to physicians, the AMA and other associations contended it is unnecessary.

"Physicians are already ethically and legally responsible for ensuring the confidentiality and security of patient's medical information," said Peter Lavine, M.D., alluding to the HIPAA privacy and security rules. "It is unnecessary to add to the existing web of federal security regulations physicians must follow," added Lavine, president of the Medical Society of the District of Columbia, which joined in the AMA lawsuit.

The Latest Move

In the June 25 "joint stipulation," the FTC agreed that it would not enforce the rule for physicians until 90 days after an opinion is issued by the U.S. Court of Appeals for the District of Columbia Circuit on the American Bar Association's case against the FTC. The lower court ruled in favor of the ABA in its bid to exempt attorneys from the rule, which paved the way for the AMA's suit.

Two U.S. Senators recently introduced legislation to exempt smaller healthcare, accounting and legal practices from the Red Flags Rule.

The Senate bill would exempt practices in the three sectors with 20 or fewer employees. It applies to healthcare professionals, including physicians, dentists, podiatrists, chiropractors, several types of therapists and veterinarians. A very similar bill, H.R. 3763, passed the U.S. House last year on a 400-0 vote.

The June 25 "joint stipulation" document notes that if Congress passes legislation to reinstate FTC enforcement of the Red Flags rule for some or all physicians, that law would take precedence over the court agreement.

About the Author

Howard Anderson

Howard Anderson

Former News Editor, ISMG

Anderson was news editor of Information Security Media Group and founding editor of HealthcareInfoSecurity and DataBreachToday. He has more than 40 years of journalism experience, with a focus on healthcare information technology issues. Before launching HealthcareInfoSecurity, he served as founding editor of Health Data Management magazine, where he worked for 17 years, and he served in leadership roles at several other healthcare magazines and newspapers.

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