 |
Second Quarter 2009 |
| Subscribe | Download PDF | |
Seeing Red (Flags)
In November 2007, the Federal Trade Commission (FTC) issued rules requiring “creditors” to develop practices to identify and act on “red flags” signaling theft of consumers’ personal information. In a controversial decision, the FTC determined that most physicians qualify as creditors under the Red Flags Rule. According to the FTC, “the definition of ‘creditor’ is broad and includes businesses or organizations that regularly defer payments for goods or services or provide goods and services and bill customers later.”
The new requirements, which take effect on August 1, 2009, have spawned an intense lobbying effort to move the FTC from its position. Legislation and litigation challenging the FTC’s process for enacting the rules as they pertain to physicians remain possibilities.
Until the situation changes, physicians should plan to comply by having “reasonable policies and procedures in place.” What constitutes “reasonable” will depend on the physician’s specific situation.
Physicians have a number of resources available to help them develop simple identity theft prevention and detection systems that comply with the new requirements. The FTC’s Web site provides guidelines, and the American Medical Association’s site includes a sample policy and checklist of possible procedures. The Red Flags Rule requirements are not complex, and most practices should think carefully before purchasing services from vendors offering compliance assistance.
Compliance for most physicians will mean taking additional time to review and implement procedures that will largely overlap with the protections and practices currently in place to comply with the Health Insurance Portability and Accountability Act of 1996 (HIPAA).
If you have questions about the Red Flags Rule, please contact our Patient Safety Department at (800) 421-2368, extension 1243.
Additional Resources:
www.ama-assn.org/ama/no-index/physician-resources/red-flags-rule.shtml
www.ftc.gov/redflagsrule
The Doctor’s Advocate is published by The Doctors Company to advise and inform its members about loss prevention and insurance issues.
The guidelines suggested in this newsletter are not rules, do not constitute legal advice, and do not ensure a successful outcome. They attempt to define principles of practice for providing appropriate care. The principles are not inclusive of all proper methods of care nor exclusive of other methods reasonably directed at obtaining the same results.
The ultimate decision regarding the appropriateness of any treatment must be made by each health care provider in light of all circumstances prevailing in the individual situation and in accordance with the laws of the jurisdiction in which the care is rendered.
The Doctor’s Advocate is published quarterly by Corporate Communications, The Doctors Company. Letters and articles, to be edited and published at the editor’s discretion, are welcome. The views expressed are those of the letter writer and do not necessarily reflect the opinion or official policy of The Doctors Company. Please sign your letters, and address them to the editor.