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Verizon Business said even though health care dropped to 1% from 3% of all breaches included in the report, the number of breaches actually went up. That's because, overall, the number of breaches reported to Verizon and the Secret Service jumped to 761 from 141 the previous year.

physicians data privacy

Physician groups press FTC for exemption from Red Flag Rules

With a May 1 deadline for compliance looming, the American Medical Association (AMA) has asked the Federal Trade Commission (FTC) to suspend the application of the Red Flag Rules to physicians and publish a new rule so that physicians have an opportunity to provide comments. In a March 9 letter to the FTC, AMA Executive Vice President Michael D. Maves wrote that the AMA “strongly believes that the FTC did not provide physicians with an opportunity to review and comment on this Rule.”

Controversy. Under the Red Flag Rules, which were finalized in October 2007 under the Fair and Accurate Credit Transactions Act (FACTA), financial institutions and creditors must develop and implement written identity theft prevention programs. FACTA provides a broad definition of “creditor” as “any entity that regularly extends, renews or continues credit.” The FTC has interpreted this definition to include health care providers and physicians.

The AMA and several other medical trade associations have taken the position that physicians were not intended to be subject to the Red Flag Rules, but the FTC has held firm in its interpretation, in spite of the objections. In a Feb. 4 letter to the AMA, the FTC reiterated its position that “the plain language and purpose of the Rule dictate that health care professionals are covered by the Rule when they regularly defer payment for goods or services.”

The FTC also has taken the position that application of the Red Flag Rules to physicians will reduce the incidence of medical identity theft and will not impose a heavy burden on health care professionals.

Rulemaking process. In addition to its claim that health care providers should not be classified as creditors, the AMA also has argued that the physician community was not informed that it would be subject to the Red Flag Rules.

Red Flag Rules Physicians FTC exemption