Wednesday, July 22, 2009

Social Workers and Identity Theft: The FTC "Red Flags" Rule

Medical identity theft is a problem of increasing proportions and disturbing implications for the provision of health care. The Federal Trade Commission (FTC) has issued new regulations to address identity theft, including medical identity theft, and clinical social workers will need to review their operating procedures for compliance with the new requirements.

The Red Flags Rule to reduce and prevent identity theft is primarily directed to financial institutions and creditors; however, a broad interpretation of the new regulations by the FTC can include health care providers as “creditors.” Entities subject to the Rule are required to implement an identity theft program capable of recognizing and responding to possible fraudulent activity. The "potential patterns, practices or specific activities indicating the possibility of identity theft" are considered “red flags” that should alert businesses to take further action.

Clinical social workers in private practice, who bill patients and insurance companies, fall within the definition of “creditors” because they are allowing patients to defer payments. Practitioners who collect all payments at the time of service would not be considered creditors.

Clinical social workers in fee-for-service practice settings will need to comply with the FTC "Red Flags" Rule by November 1, 2009 if they are billing health insurers for services.
A small social work practice can develop simple written policies to readily comply. A do-it-yourself four-step guide is available online: Click to open the Do-it-yourself Prevention Program

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