Docs seek to block 'red flags' rule

Arguing that it places physician practices under the same regulations as banks, credit card companies and mortgage lenders, a lawsuit was filed in federal court in Washington seeking to block the Federal Trade Commission from imposing on doctors its "red flags" rule which deals with preventing, detecting and mitigating identity theft.

"In applying the Red Flags Rule to physicians who do not require payment in full at the time of providing care to patients, the FTC is exceeding its statutory authority and acting arbitrarily and capriciously," according to the lawsuit. It also cites a Nov. 29, 2009 decision where the American Bar Association filed a similar suit against the FTC and the district court held that lawyers and law firms were not necessarily "creditors" when they grant clients the right to defer payment and so were not subject to the rule. The suit further states that, "by failing to articulate a rational connection between the practice of medicine and identity theft," the FTC has acted arbitrarily and capriciously, and also failed to give physicians reasonable notice and the opportunity to comment on the rules as they were being formulated and interpreted.