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

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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

The U.S. House of Representatives this week voted unanimously—400-0—to pass legislation that would exempt certain healthcare facilities from the “red flags” rule.

Set to take effect Nov 1, the Federal Trade Commission's “red flags” rule requires businesses that can be loosely defined as “creditors” to implement identity theft prevention programs. Nursing homes and other healthcare organizations fall into this broad category, since many of the services they provide are paid for at a later date. Under the newly passed bill, H.R. 3763, healthcare, accounting and legal practices that employ fewer than 20 people would automatically be exempt from the rule.

The bill also would create a regulation that allows any business to apply for exemption, provided it meets one of three guidelines. These are: The business knows all of its customers or clients individually; it only performs services in or around the residences of its customers; or it has not experienced incidents of identity theft and is part of an industry that rarely experiences the problem. The Senate would need to pass a similar bill before it would become law.