Enforcement of 'Red Flags Rule' Set for June 1; AMA, Others File Lawsuit
Enforcement of 'Red Flags Rule' Set for June 1; AMA, Others File Lawsuit In Letter to FTC, NAHC Seeks Exemption for Home Health, Hospice, DME Suppliers That Are Small Businesses In response to the burgeoning crime of identify theft, the Federal Trade Commission (FTC) established regulations known collectively as the "Red Flags Rule" requiring financial institutions and creditors to develop and implement written identity theft prevention programs. Enforcement of the rule has been delayed for some time and is now slated to begin June 1, 2010. FTC has identified health care providers as potential "creditors" to whom the rule will apply — when certain criteria are met.
The current June 1 effective date for compliance with Red Flags Rule requirements had been changed several times over the past year. In light of those multiple changes, requests for an exemption for health care providers, and a recently filed lawsuit, it is likely that this date could again be amended. The National Association for Home Care & Hospice (NAHC) recommends that members monitor NAHC Report and other NAHC communications for any changes prior to June 1, and also review guidance and other materials on the matter.
The American Medical Association (AMA), American Osteopathic Association, and Medical Society of the District of Columbia filed the lawsuit noted above on May 21 in the U.S. District Court for the District of Columbia. Their complaint seeks to prevent FTC from applying the identity theft regulations to physicians. The groups argue that the Red Flags Rule exceeds powers delegated to it by Congress, and that its application to physicians is "arbitrary, capricious, and contrary to the law."
In a letter to FTC, NAHC takes a similar position and seeks an exemption from "Red Flags Rule" requirements for home health, hospice, and durable medical equipment (DME) suppliers that are small businesses. NAHC urges FTC to recognize these businesses as not meeting the definition of "creditor" to whom Congress intended that the requirements apply. NAHC is awaiting a response from FTC and will keep members apprised of any information received in response, as well as new developments in the AMA-led lawsuit.
If there is no change in the rule's application to health care providers, NAHC has published a simple guide online to assist providers meeting FTC's criteria with Red Flags Rule compliance. This document provides an overview of the rule as well as a compliance template and a sample policy for home health agencies, hospices, DME suppliers, and private duty agencies to use when creating their Red Flags Rule programs. Most of the information for this guide, which is available at www.nahc.org/regulatory/RedFlagsRuleFinal.doc, was gathered from various FTC resources.
NAHC Report Article
Wednesday, May 26, 2010
NAHC Report 2010. Copyright National Association for Home Care and Hospice, Inc (www.nahc.org) .— Reprinted with permission.
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