Question
Last year I took a course in the Red Flags Rule and was told that audiologists needed to comply but that the Federal Trade Commission was delaying enforcement until December 31, 2010. What is the current status?
Answer
In December 2010, President Obama signed into law the "Red Flag Program Clarification Act of 2010 (Bill, S. 3987)," which further clarifies the type of "creditor" that must comply with the Red Flags Rule. According to this Act, now Public Law No 111-319, a creditor includes only entities that use consumer reports, furnish information to consumer reporting agencies or extend credit. A creditor is not someone who advances funds on behalf of a person for expenses incidental to a service provided. The bottom line? Audiologists no longer meet the definition of a creditor under the Red Flags Rule and thus are not legally required to comply with it. I confirmed this with an audiology billing/coding expert before writing this reply (thanks, Dr. Cavitt!). Taking steps to reduce the potential for identity theft/medical identity theft in one's audiology practice may be good business, but it is not required by law.
Carolyn Smaka is Editor-in-Chief of AudiologyOnline. Prior to joining AudiologyOnline in 2008, she worked as a clinical audiologist, audiology administrator, and in a variety of roles for a leading hearing instrument manufacturer.
Carolyn Smaka
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