Red Flag Rules Compliance Deadline is May 1, 2009 – Are You Ready?

Posted April 27, 2009

Physicians and physician groups may be unaware that they have a looming deadline for compliance with complex new federal regulations. The Federal Trade Commission (“FTC”) and other federal agencies issued a set of rules that require “financial institutions” and “creditors” holding consumer or other “covered” accounts to develop and implement an identity theft prevention program that originally required compliance with the regulations by November 1, 2008. The FTC subsequently postponed enforcement of these rules until May 1, 2009. These rules, commonly referred to as the Red Flag Rules (the “Rules”), affect individual physicians, physician groups, hospitals and other healthcare organizations that qualify as “creditors” based upon billing and collection practices. The Rules provide guidelines for identifying patterns, practices and specific forms of activity – in short, red flags – that indicate the possible existence of identity theft.

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