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ACR News: Physician Groups File Lawsuit Against FTC Red Flags Rule

(ACR) - According to a news release issued by the American Medical Association (AMA), on May 21, the AMA, American Osteopathic Association and the Medical Society of the District of Columbia filed a lawsuit in federal court seeking to prevent the Federal Trade Commission (FTC) from extending the “red flags” rule on identity theft to physicians. The current date for the Rule’s enforcement is June 1, 2010.

The Red Flags Rule matters to ACR members because they may have obligations under it as “creditors.” FTC’s Rule defines a “creditor” as an entity that extends credit to a consumer by establishing a “covered account” that permits multiple payments. The FTC considers physicians who bill their patients for services rendered (including copayments and coinsurance) to be creditors. Consequently, the FTC maintains that physician-creditors must develop and implement written identity theft prevention programs for their practices to comply with the Red Flags Rule. Failure to comply with the Rule could lead to administrative penalties or fines up to $2,500 per violation.

In the October 2009 ACR Bulletin, ACR updated members on Red Flags Rule developments and what they mean for radiology practices.

The FTC reiterated that it has offered additional resources and guidance on the Rule. You can review the FTC’s Red Flags Rule materials on its web site at www.ftc.gov/redflagsrule.

To read the AMA news release in its entirety, click here.

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