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Red Flag Appeals Court Ruling Victory for Physicians, AMA Says

John Commins, for HealthLeaders Media, March 7, 2011

The American Medical Association Monday applauded a federal appeals court's ruling that physicians who bill patients after providing services are not subject to Federal Trade Commission so-called red flag rules that apply to creditors.

AMA President Cecil B. Wilson, MD, said the ruling Friday by the U.S. Court of Appeals in Washington, DC, validates the AMA's long-standing argument with the Federal Trade Commission about the red flag rules' application to physicians.

The appeals court, ruling on a lawsuit filed by the American Bar Association that challenged the application of the red flags rule to attorneys, said the FTC's regulations were made invalid because Congress passed the Red Flag Program Clarification Act of 2010 in December to better define who is considered a creditor under the rule.

"The court's decision reinforces the intent of a new law clarifying the scope of the red flag rule and helps eliminate any further confusion about the rule's application to physicians," Wilson said in a statement. "The AMA will remain vigilant that the FTC respects the meaning and intent of the Clarification Act."
The AMA and other physicians' groups objected to the FTC's requirement for physicians to verify the identity of their patients before agreeing to treat them if the patients are not paying in full at the time of the visit.

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