Red Flags Rule Update

By Gina Luke, Assistant Director of the GRD

The AVMA continues to advocate for a permanent end to the Federal Trade Commission's (FTC) application of the Red Flags Rule to veterinarians and other health care professionals.

Although health care professionals are not specifically mentioned in the Final Rule, FTC staff attorneys took a position that health care professionals are "creditors" of patients or clients when they do not receive payment in full at the time of treatment or service delivery. As a result, the rule requires every health care professional – including veterinarians – to put in place a program designed to detect identity theft. Due to pressure from AVMA and others, the FTC has agreed to postpone enforcing the Rule to August 1.

Senator Russell Feingold (D-WI) recently voiced his concern in a letter to the FTC urging them to change course. Feingold strongly suggested that the federal agency to comply with the Regulatory Flexibility Act which requires them to weigh the disproportionate impact of federal regulations on small business. Furthermore, he recommended that the agency delay enforcement of the Rule for health care until at least November 1.

Additionally, bi-partisan legislation (H.R. 2345) has been introduced in the U.S. House of Representatives by Representatives John Adler (D-NJ-3), Mike Simpson (R-ID-2) and Paul Broun (D-GA-10). The bill would exempt health care practices with 20 or fewer employees from the Rule.

On June 1, Dr. Ron DeHaven, AVMA CEO, sent a letter to Karen Mills, Administrator for the U.S. Small Business Administration, urging her to contact the Federal Trade Commission (FTC) about the negative ramifications of applying the Red Flags Rule, 16 C.F.R § 681.2 to health care providers. Additionally, AVMA staff is conducting visits on Capitol Hill to raise awareness among members and staff about H.R 2345.

For more information about the Red Flags Rule visit the AVMA website at http://www.avma.org/issues/FTC_red_flags_rule.asp

For more information, please contact Gina Luke.