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April 2009
Vol. 19 No. 4
Practice Management
Physician Practices Must Protect Against Identity Theft by May 1

Physician practices must have policies in place to protect against identity theft under a Federal Trade Commission (FTC) rule going into effect on May 1. The American Medical Association (AMA) has developed tools to help physicians comply.

FTC’s “Red Flags Rule” requires creditors to protect clients’ personal identifying information—for example, insurance information—from being used fraudulently. FTC considers physician practices to be creditors because they bill after services are rendered and often defer collection of copayments until after receiving reimbursement from insurance providers. Physician practices that do not have policies in place by May 1 are subject to a $2,500 fine per “knowing violation” of the rule that suggests a pattern of behavior.

AMA disagrees with this interpretation and is opposing implementation of the rule. However, with the deadline looming, AMA has developed resources to help physicians comply. Resources, including an explanation of the rule and a sample compliance policy, are available online.
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