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Association pursues Red Flags Rule remedies

Washington—Four-way negotiations continue on the Red Flags Rule as the FTC's latest enforcement moratorium is set to expire June 1.

Federal Trade Commission Chairman Jon Leibowitz told the Association the commission is amenable to another enforcement delay as the dental and other health professions press for exemption while Congress and the judicial system examine the Red Flags Rule. Meanwhile, the Association is in negotiations with the Senate Banking Committee over legislation that would exempt dental practices from Red Flags regulation.

The FTC delayed enforcement throughout 2009 from May 1 to Aug. 1 to Nov. 1. The current moratorium on enforcement expires June 1. At an April 7 meeting with ADA President-elect Raymond Gist and ADA staff, Mr. Leibowitz said the commission would be amenable to extending the moratorium beyond June 1. However, the FTC has made no public announcement regarding further delay or enforcement of the rule.

The Red Flags Rule requires financial institutions and creditors to develop a written plan to prevent and detect identity theft. The FTC has said that dentists and other health professionals are creditors subject to the regulation depending on their credit arrangements with patients as defined by the Fair and Accurate Credit Transactions Act of 2003. The ADA has challenged the FTC on that interpretation of the FACT Act and its application of the rule to dentists.

In addition to these administrative challenges, the Association helped introduce legislation to exempt small health care practices, like the typical dental practice, from the regulation. The U.S. House of Representatives on Oct. 20, 2009, approved by a 400-0 vote legislation to exempt most dental offices from the Red Flags Rule. The Senate has not acted.