Medical Groups Sue For Exemption From New FTC Credit Rules
Some speciality publications are covering the dispute over possible impact on dentists, doctors and other medical professionals.
Modern Healthcare: "Arguing that it places physician practices under the same regulations as banks, credit card companies and mortgage lenders, a lawsuit was filed in federal court in Washington seeking to block the Federal Trade Commission from imposing on doctors its 'red flags' rule which deals with preventing, detecting and mitigating identity theft. The lawsuit, filed by the American Medical Association, American Osteopathic Association and the Medical Society of the District of Columbia, states that the rule requires 'financial institutions' to implement a written identity-theft prevention and detection plan and notes that the FTC had announced that the physicians had until June 1 to comply."
The suit "states that, 'by failing to articulate a rational connection between the practice of medicine and identity theft,' the FTC has acted arbitrarily and capriciously" (Robeznieks, 5/21).
Medscape: "The Red Flags Rules are so named because financial institutions and credit-extending businesses like auto dealerships covered by the regulations must draft written plans on how they will look for warning signs, or red flags, of identity theft, and respond to any they find."
The plaintiffs contend "that the Red Flags Rules would impose an unnecessary administrative burden on them, not to mention interfere with the physician-patient relationship. They also argue that physicians do not amount to creditors under the law simply because they allow patients to pay their bills after the time of service" (Lowes, 5/21).
Medpage Today: "But the FTC said physicians are creditors because they extend credit to patients when they bill them, and do not require upfront payment. Under the law, a deferral of debt is considered 'credit,' even though doctors' offices don't charge interest, and, therefore, physicians should be subject to the law's provisions. 'Thus, although the primary responsibility of physicians is to provide healthcare, they also are conducting a business -- a business that provides service for which payment may be deferred,' wrote Eileen Harrington, acting director of the Bureau of Consumer Protection at the FTC in a February letter to the AMA" (Walker, 5/21).
