Temporary reprieve from 'red flags' rule could be on horizon for healthcare providers

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An agreement to exempt healthcare providers from the federal “red flags” privacy rule could be forthcoming, according to a recent report from the Bureau of National Affairs.

The Federal Trade Commission, which is proposing the rule to protect consumers from identity fraud, has reached a “stipulation in principle” to provide a temporary exemption for healthcare groups, BNA reported. The exemption would last until a pending lawsuit filed by the American Medical Association and other healthcare groups can be resolved. Final language for the agreement could emerge in the next few days, according to BNA.

The red flags rule would require businesses that can be considered “creditors” to establish privacy protection schemes by Dec 1. Many healthcare providers, including nursing homes, qualify as “creditors” since they provide services for which they are not immediately reimbursed.