U.S. House passes bill exempting dentists from Red Flags Rule

Oct 20, 2009

The U.S. House of Representatives yesterday passed bipartisan legislation that will exempt dental offices and other small businesses from the so-called Red Flags identity theft rules slated to take effect November 1.

HR 3763 amends the Fair Credit Reporting Act to provide for an exclusion from Red Flag guidelines for healthcare practices and law and accounting firms with 20 or fewer employees. In addition, it would create a system where the Federal Trade Commission (FTC) has some flexibility to waive implementation of the regulations for other industries.

"It is obvious that physicians and dentists are not creditors, and they should not be forced to spend hundreds of dollars to comply with this needless regulation," said Rep. Mike Simpson (R-ID), who co-sponsored the bill with Rep. John Adler (D-NJ) and Rep. Paul Broun (R-GA). "They don't require full payment at the time of service because they first bill the insurance company, then they bill the patient the remainder of the bill. This system should not be treated the same as a loan with a financial institution. Healthcare is expensive enough; we don't need to create needless rules to increase costs even more."

The ADA-backed bill will now go before the Senate for consideration, although it does not yet have a Senate sponsor, according to a spokesperson from Rep. Simpson's office.

“Over the past year, the ADA worked with numerous health care organizations and small business groups in urging Congress to quickly fix this problem," said ADA President Ronald Tankersley in a prepared statement. "We hope that the Senate acts with similar speed to protect dentists and other small businesses from being forced to work under the yoke of an FTC rule that was never intended to apply to them.”