Physicians Group: No 'Red Flags' Here

The nation's leading physicians' group says the Federal Trade Commission's so-called "red flags" rule on identity theft will be bitter medicine if it goes into effect June 1.

The rule requires most businesses to develop and implement written identity theft prevention and detection programs to protect consumers from identity theft. In spite of a recent court decision that appears to put most medical practices within the new rule’s scope, the American Medical Association sought a delay for the rule to offer its comments on how the new regulation would affect the medical profession.

The AMA agrees that medical identity theft is a particular concern, and that insurance information can be used to make false claims for services or goods. But the association still wants a chance to comment on the proposed change, since the FTC asserts that physician practices are "creditors" when they accept insurance and bill patients after services are provided.

That also applies if physicians allow patients to set up payment plans after services have been provided. AMA officials say the new FTC rules are further time-consuming regulation that impinges on treating patients effectively. The AMA wants an exemption similar to the one granted to the American Bar Association in 2009. Despite its objections, the AMA has also published a set of guidelines for compliance if the "red flags" rule takes effect June 1 as it is currently written.