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The AMCNO joins the American Medical Association and many other medical organizations in applauding the recent court decision finally clarifying the application of the red flags rule. A federal appeals court issued a decision that validates the long-standing argument to the Federal Trade Commission (FTC) that physicians who bill after rendering services are not subject to the red flags rule as creditors. To view the federal appeals court decision go to: http://ama.pr-optout.com/ViewAttachment.aspx?EID=rhvBPIv6TFrQEnOBF28gCsqW26QjUiF4A5BGk5cMYbg%3d

The United States Court of Appeals for the District of Columbia Circuit found the present regulations of the FTC invalid in light of the Red Flag Program Clarification Act of 2010, passed by Congress last December to shed much needed light on who is considered a creditor under the red flags rule. The court issued the judgment in a lawsuit filed by the American Bar Association challenging the application of the red flags rule to attorneys.

According to the court’s opinion, “…the Clarification Act makes it plain that the granting of a right to ‘purchase property or services and defer payment therefore’ is no longer enough to make a person or firm subject to the FTC’s red flags rule – there must now be an explicit advancement of funds. In other words, the FTC’s assertion that the term ‘creditor,’ as used in the red flags rule and the FACT Act, includes ‘all entities that regularly permit deferred payments for goods or services,’ including professionals ‘such as lawyers or health care providers, who bill their clients after services are rendered,’…is no longer viable.”