Physicians file lawsuit on FTC's 'red flags rule'

June 24, 2010

The American Medical Association, American Osteopathic Association, and the Medical Society of the District of Columbia have filed a suit in federal court seeking to prevent the Federal Trade Commission from extending identity theft regulations to physicians.

The American Medical Association, American Osteopathic Association, and the Medical Society of the District of Columbia have filed a suit in federal court seeking to prevent the Federal Trade Commission from extending identity theft regulations to physicians.

The complaint targets the "red flags rule," which requires creditors to implement safeguards against identity theft. The medical societies charge that the FTC’s rule exceeds the powers delegated to it by Congress and that its application to physicians is “arbitrary, capricious, and contrary to the law.”

"This unjustified federal regulation of medicine treats physician practices like banks, credit card companies, and mortgage lenders," said AMA President-elect Cecil B. Wilson, MD. “The extensive bureaucratic burden of complying with the red flags rule outweighs any benefit to the public.”

The suit follows 2 years of communications to the FTC from the AMA and AOA regarding the unintended consequences of the red flags rule. On Jan. 27, the AMA and AOA joined other groups to petition the FTC to exclude physicians from the red flags rule. The FTC responded on March 25 saying it could not accommodate the request.

Physicians can turn to AMA online resources here to help comply with the FTC’s rule.