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January 2011
Clinical Practice Management
Physicians Excluded from FTC’s Identity Theft Rule

Physician practices have been excluded from a Federal Trade Commission (FTC) rule that would have required them to have policies in place protecting against patients’ identity theft or face a fine.

FTC’s “Red Flags Rule” requires creditors to protect clients’ personal identifying information, such as insurance information, from being used fraudulently. FTC originally considered physician practices to be creditors, but the American Medical Association (AMA) and others disagreed with this interpretation and filed suit to prevent FTC from extending the rule to physicians. In December 2010, President Obama signed legislation into law that excludes physicians from the rule.

Prior to the legislation’s passage, the deadline for practices to have such policies in place—or face a fine of $2,500—was extended several times throughout 2009 and 2010.
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