Red Flags
Many physicians and hospitals received a reprieve and probably didn’t even know it. In October, the Federal Trade Commission delayed enforcement from Nov. 1, 2008 to May 1, 2009 of its so-called “red flags” rules, which require creditors to establish a written program for combating identity theft.
The problem occurred because the FTC has defined most physicians and hospitals as “creditors,” which immediately drew criticism from the American Medical Association and other medical groups, who argue that the FTC is too broadly defining the term.
The red flags rules are based on legislation that defines a creditor as “any person who grants the right to defer payments” and therefore this would apply to physicians and hospitals who accept payment, either in part or in full, at a time after they provide medical services to patients.
This would be a great reason for physicians and hospitals to immediately begin demanding full payment at the time of service and make patients deal with the insurance hassles.
This red flags requirement makes the companies create a written program listing warning signs for ID theft, how they’ll detect those threats, and how they’ll respond.
Hospitals and physicians would have to define a program to screen for the following types of activities and manage the program accordingly:
· Records showing medical treatment that is inconsistent with a patient’s history
· Suspicious documents, such as a forged insurance card
· A patient who has an insurance number but no card or documentation
· Unusual billing patterns
The FTC did decide to delay the enforcement of the red flags rules because there was “lots of confusion” about the rules among “entities not accustomed to being regulated by the FTC”
If the rule takes effect, the penalties can be a fine to violators of up to $2,500 per offense.
The AMA sent a letter to the FTC and they along with 26 other medical organizations said they “strongly disagreed” with the FTC’s decision to define physicians as creditors.
There has reportedly been no response to the AMA’s statements.
Most physicians and relatively few hospitals are aware of this rule but the ones that are stated it would cost them more than $10,000 to comply.
Here is another example of over-regulation that is crushing our health care delivery system and creating much more needed expense.
The problem occurred because the FTC has defined most physicians and hospitals as “creditors,” which immediately drew criticism from the American Medical Association and other medical groups, who argue that the FTC is too broadly defining the term.
The red flags rules are based on legislation that defines a creditor as “any person who grants the right to defer payments” and therefore this would apply to physicians and hospitals who accept payment, either in part or in full, at a time after they provide medical services to patients.
This would be a great reason for physicians and hospitals to immediately begin demanding full payment at the time of service and make patients deal with the insurance hassles.
This red flags requirement makes the companies create a written program listing warning signs for ID theft, how they’ll detect those threats, and how they’ll respond.
Hospitals and physicians would have to define a program to screen for the following types of activities and manage the program accordingly:
· Records showing medical treatment that is inconsistent with a patient’s history
· Suspicious documents, such as a forged insurance card
· A patient who has an insurance number but no card or documentation
· Unusual billing patterns
The FTC did decide to delay the enforcement of the red flags rules because there was “lots of confusion” about the rules among “entities not accustomed to being regulated by the FTC”
If the rule takes effect, the penalties can be a fine to violators of up to $2,500 per offense.
The AMA sent a letter to the FTC and they along with 26 other medical organizations said they “strongly disagreed” with the FTC’s decision to define physicians as creditors.
There has reportedly been no response to the AMA’s statements.
Most physicians and relatively few hospitals are aware of this rule but the ones that are stated it would cost them more than $10,000 to comply.
Here is another example of over-regulation that is crushing our health care delivery system and creating much more needed expense.
Labels: healthcare, regulation
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