Lawmakers Exempt Physicians from "Red Flags" ID Theft Rule

Congress this week voted to exempt doctors from the so-called “Red Flags” Rule, which requires financial institutions and creditors -- including physician practices -- to implement policies that would prevent identity theft.

Physicians groups have long argued that doctors should be exempt from the rule, maintaining that physicians are not actual creditors. The American Medical Association earlier this year filed suit to prevent the government from imposing the rule on doctors, saying it would force them to follow unnecessary and difficult procedures that would do nothing to improve patient care. The AMA also claimed that complying with the rule would tend to erode the doctor/patient relationship, which is based on trust.

In addition to making patients prove their identities -- such as presenting a driver’s license or military ID card -- every time they aren’t paying for services in full, the rule would have required doctors to set up complex ID theft prevention programs by the Dec. 31 enforcement deadline.

In a statement, AMA president Cecil Wilson said, “The AMA is pleased that this legislation supports AMA’s long-standing argument to the FTC that physicians are not creditors. This bill will help eliminate the current confusion about the rule’s application to physicians.”

The bill is expected to be presented to President Obama for signature before the rule's enforcement deadline on Dec. 31.