FTC Delays Enforcement of Red Flag Rule

May 3, 2009

On April 30, 2009, the Federal Trade Commission (FTC) will delay enforcement of its “Red Flags” rule until August 1. The delay gives physicians’ offices and hospitals an extra three months to comply with the new antifraud rule.

Briefly, the Red Flag Rule requires physician offices, clinics, and hospitals to conduct a risk assessment to identify gaps in their billing process that might be putting patients at risk of identity theft, and to establish procedures to prevent such problems and respond to them if they occur.

The costs of complying with the Rule can run over $10,000 according to several surveys, but once the rule goes into effect, physicians who fail to comply could be slapped with fines of $2,500 per violation.

The American Medical Association continues to lobby the FTC to exempt physicians from the Rule.

Here’s a link to the FTC’s announcement concerning the delay.

Read more about the Red Flag Rule on MedPage Today here and here.




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