Health groups to FTC: Exclude health professionals from "red flags" rule

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A letter was sent to Federal Trade Commission (FTC) Chairman Jon Leibowitz by leaders of the American Medical Association, American Osteopathic Association, American Dental Associationvand American Veterinary Medical Association (AVMA) to exclude healthcare professionals from a “red flags” rule intended to combat identity theft.

The FTC's interpretation of the regulation imposes an unfunded mandate on healthcare professionals for detecting and responding to identity theft, according to the organizations. In the letter, they asked the FTC to make it clear that the rule will not apply to their members given the result of recent litigation brought by the American Bar Association against the FTC where the U.S. District Court for the District of Columbia ruled that lawyers should be excluded from the requirements imposed by the "red flags" rule.

"The court ruling sends a clear signal that the FTC needs to re-evaluate the broad application of the red flags rule," said AMA President J. James Rohack, MD. "Our four organizations firmly believe that applying the rule to health professionals, but not to lawyers, would be unfair."

The court decision follows criticism that the FTC's interpretation of the Fair and Accurate Credit Transactions Act of 2003 led the commission to postpone the rule's effective date to June 1, but it has not changed the position that the rule will apply to healthcare professionals.