Lawsuit seeks to block Red Flags Rule for doctors
The American Medical Association, the American Osteopathic Association, and the Medical Society for the District of Columbia have filed suit against the FTC in an attempt to exclude physicians from its Red Flags Rule, which requires financial institutions and other creditors to develop and implement a written plan for spotting warning signs of identity theft.
The American Medical Association (AMA), the American Osteopathic Association, and the Medical Society for the District of Columbia have filed suit against the FTC in an attempt to exclude physicians from its Red Flags Rule, which requires financial institutions and other creditors to develop and implement a written plan for spotting warning signs of identity theft.
The FTC contends that the regulation applies to physician practices that act as creditors when they accept insurance and bill patients after services are provided or allow patients to set up payment plans after services have been rendered. The suit, filed in May, alleges that the FTC is exceeding its statutory authority and acting "arbitrarily and capriciously" in applying the rule to physicians.
According to the suit, the regulation is not applicable to physicians because they do not fit within the definition of "creditor" under the Fair and Accurate Credit Transactions Act. In addition, the suit claims that the Red Flags Rule would impose significant burdens on physicians, particularly sole practitioners and small groups, and duplicates privacy requirements under existing laws such as the Health Insurance Portability and Accountability Act. For these and other reasons, the plaintiffs are asking the US District Court for the District of Columbia to declare application of the Red Flags Rule to physicians unlawful.
AMA v FTC (DDC 2010). http://www.ama-assn.org/ama1/pub/upload/mm/395/red-flags-lawsuit.pdf. Accessed July 16, 2010.
