Red Flags Rule:
Identity Theft Isn’t An Issue For Veterinary Practices

By BRENDA EGGERT BRADER,
Communications and Public Relations Director

Veterinarians have dodged implementation of the Red Flags Rule. Legislation, known as the Red Flags Rule, is now a moot point for veterinarians. The rule, dealing with identity theft protection, has been dismissed from the health care field with the unanimously-passed U.S. House and Senate bills -- the Senate, the first of December, and the most recent, the U.S. House passed on Dec. 8.

The bill exempts various entities, and doesn’t explicitly mention the veterinarians, but includes them among health care providers who are exempt from the rule.

 “What it does is omit health care from the bill, of which we (veterinarians) are considered a part,” said Gina G. Luke, Assistant Director, American Veterinary Medical Association (AVMA) Governmental Relations Division in Washington, D.C.  “Since we are a health care provider, we are good.”

The Bill S3987 has been sent to President Barrack Obama who is expected to sign it into law before the end of the calendar year, Luke said.

History

The issue surfaced in 2007 because the Federal Trade Commission had said that "health care providers are creditors if they bill consumers after their services are completed,” adding "health care providers that accept insurance are considered creditors if the consumer ultimately is responsible for the medical fees." FTC's basis for this interpretation was whenever "payment is made after [a] product was sold or [a] service performed," the seller or service provider has extended the recipient credit. Health care providers are deemed to have "covered accounts" because their "continuing relationships with consumers for the provision of medical services" qualifies as an account "for personal, family, or household services that involves multiple payments or transactions."

The Red Flags Rule, 16 C.F.R § 681.2, requires each financial institution and creditor with certain covered accounts to have identity theft prevention programs, which must provide for the identification, detection, and response to patterns, practices, or specific activities that could indicate identity theft. The FTC issued final regulations implementing Sect. 114 (Red Flags Rule), on Nov. 9, 2007. The Rule was set to become effective on Nov. 1, 2008, but the FTC suspended enforcement multiple times until this last delay through Dec. 31, 2010.

Veterinarians do not have to implement any Red Flags Rule in their practices.

AVMA

The FVMA appreciates the diligence the AVMA Governmental Relations Division gives to its commitment in continually maintaining its watch on government relations as an advocate for the veterinary profession on both a national and state level.