Red Flags Rule delayed again

Thursday, May 27, 2010

WASHINGTON - The Federal Trade Commission (FTC) has delayed its enforcement of the "Red Flags" Rule until Dec. 31, 2010, it announced this morning.

It was slated to begin enforcing the rule June 1.

The FTC said in a release that it had been asked by members of Congress for the delay so it would have time to consider legislation that would limit who was affected by the rule.

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

The Red Flags Rule requires creditors to put identity theft measures in place. DMEs are considered creditors any time they don't collect payment upfront.

Physicians have argued that they shouldn't be considered creditors. On May 21, the American Medical Association, the American Osteopathic Association and Medical Society of the District of Columbia filed a lawsuit to prevent the FTC from requiring physicians to comply with the rule.

Physicians do not generally require payment upfront for a variety of reasons, including the need to determine what a patient's insurance will cover, says the suit.

The rule has been delayed several times to give affected companies more time to develop and implement their programs.