“ RED FLAG”  RULES  ENFORCEMENT is DELAYED UNTIL June 2010

In an attempt to address the problem of identity theft ( including a report that 5% of identity theft victims have experienced a form of medical identity theft,  the FTC has issued the “Red Flags” Rule. This rule, which has been in effect since January 1, 2008, requires businesses and organizations, including health care providers, to develop a written program to help identify the warning signs of identity theft.
The FTC will begin to enforce this rule June 1, 2010.

Is your therapy entity  required to meet the “Red Flags” Rule? The FTC has posted an article on their website explaining what health care providers need to know about complying with the “Red Flags” Rule (http://www.ftc.gov/bcp/edu/pubs/articles/art11.shtm). They have also developed a guide to assist businesses in implementing a program that best suits their particular needs. This guide can be found at http://www2.ftc.gov/bcp/edu/microsites/redflagsrule/get-started.shtm.

Please note that there is  pending legislation that would  exempt health care practices, including physical, occupational and speech  therapy practices, with fewer than 20 employees from the Federal Trade Commission's (FTC) "Red Flag" Rules. HR 2345, sponsored by Rep John Adler (D-NJ), would exempt small practices from the new FTC requirement for creditors to establish a program to prevent identity theft in their practices. Health care providers, including physical therapists, are considered by the FTC to be creditors because they provide services to patients without requiring payment in full at the time of service.  Until the exemption bill is voted on, compliance is mandatory.