Idaho Congressman Mike Simpson joined his colleagues in introducing legislation (H.R. 2345) that would exclude small health care practices – those with 20 or fewer employees – from the Red Flags rule. The Red Flag Rule is part of the Fair and Accurate Credit Transaction Act of 2003 (FACT Act) and would require health care professions to follow similar regulations as financial institutions and creditors because their billing cycle can take several months to complete. 

“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.  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,” said Simpson. “Health care is expensive enough; we don’t need to create needless rules to increase costs even more.”

The American Dental Association received a letter from the FTC stating, “if, in fact, a dentist does not bill clients . . . or does not defer payment for services, then credit is not being extended and therefore the Red Flags Rule will not apply.” This interpretation actually discourages practitioners to develop flexible payment plans for patients who can’t afford full payment at the time of service.

“We talk about affordable healthcare for the American public, yet this interpretation of the law would actually end up increasing the costs for all patients,” said Simpson. “Increasing the amount of bureaucracy and needless government regulation is not the right direction  for our country, not now, not ever.”

If passed into law, H.R. 2345 would exempt exclude small health care practices from the Red Flags rule.