Congress passes legislation changing 'red flags' rule, providers approve

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House passes bill exempting certain healthcare facilities from 'red flags' rule
House passes bill exempting certain healthcare facilities from 'red flags' rule

President Obama is expected to sign legislation that narrows the scope of the Federal Trade Commission's “red flags” privacy rule.

The rule, which the FTC is expected to enforce at the end of the year, requires businesses that can be considered “creditors” to establish privacy protection. Many healthcare providers, including nursing homes, qualify as “creditors” since they provide services for which they are not immediately reimbursed.

The legislation exempts from the rule any entity that "advances funds on behalf of a person for expenses incidental to a service provided by the creditor to that person." It excludes from the red flags rule healthcare providers who bill in arrears for services rendered. The American Association of Homes and Services for the Aging noted in a newsletter Monday that it supported this change to the rule.