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Doctors Get Reprieve To 2011 From June 1 Red Flag Rule Enforcement

Cheryl Clark, for HealthLeaders Media, June 1, 2010

One week after the American Medical Association said it has filed a lawsuit against the federal government for imposing the Red Flags rule on physicians, the Federal Trade Commission today said it would delay enforcement from the Tuesday June 1 date until Dec. 31.

According to an FTC statement, the end of the year will give time "while Congress considers legislation that would affect the scope of entities covered by the Rule. Today's announcement and the release of an Enforcement Policy Statement do not affect other federal agencies' enforcement of the original Nov. 1, 2008 deadline for institutions subject to their oversight to be in compliance."

In the statement, FTC Chairman Jon Leibowitz said, "Congress needs to fix the unintended consequences of the legislation establishing the Red Flags Rule—and to fix this problem quickly." He added, "As an agency we're charged with enforcing the law, and endless extensions delay enforcement."

AMA officials, which want the FTC to completely exempt doctors from having to comply with the rule, said they are pleased. They joined the American Osteopathic Association in a lawsuit last week saying it imposes an unnecessary and cumbersome burden on physicians and erodes the doctor-patient relationship, which is based on trust.

By the physicians' interpretation, the rule would require them to request that their patients prove their identities upfront whenever patients are not paying in full at the time of their visit, and would require them to set up identity theft prevention and detection programs. Also, it would do nothing to improve care.

"For two years, the AMA has made the case to the FTC that physicians are not creditors like banks and lenders, and the misguided red flags rule should not apply to them," the AMA said in a statement. "Last November, a federal court blocked the rule from being applied to attorneys after the FTC was found to be extending its regulatory power beyond that authorized by Congress. We hope this latest extension to the compliance date is a promising sign that the AMA lawsuit has caught the attention of the FTC."

The AMA added, "We hope this latest extension will be long enough for the FTC to take a good, hard look at the rule and finally exclude physicians from this unjustified and burdensome regulation of medicine."


Cheryl Clark is senior quality editor and California correspondent for HealthLeaders Media. She is a member of the Association of Health Care Journalists.
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