Council of Medical Specialty Societies Intervenes as Plaintiffs in Case Against the FTC

CMSS sends motion to intervene on “Red Flags Rule” on behalf of all physicians.  

Read Filing

August 17, 2010

Chicago, IL – The Council of Medical Specialty Societies (CMSS) today announced that on behalf of its Member Societies and other Intervenor Societies, it filed a motion to intervene in an existing case to prevent the Federal Trade Commission (“FTC”) from applying the “Red Flags Rule” to all physicians. In the opinion of CMSS, compliance with the Red Flags Rule imposes significant burdens on physicians, particularly solo practitioners and those practicing in small groups.

The FTC has taken the position that physicians are "creditors" under the Rule and that physicians were to comply with the Rule by June 1, 2010 a date which has now been postponed to December 31, 2010. The case argues that the FTC exceeded its statutory authority in applying the Rule to physicians and acted arbitrarily. In addition, the complaint contends that the FTC failed to follow the required notice and comment procedures under the Administrative Procedures Act. The legal action also references the recent American Bar Association action that resulted in the U.S. District Court for the District of Columbia ruling that the Red Flags Rule did not apply to lawyers.

“CMSS took the lead on this to protect all physician members of the CMSS societies from the unintended consequences of the Red Flags Rule,” said Norman Kahn, MD executive vice president and CEO of CMSS. “Adhering to the policies of the Red Flags Rule would substantially drain the financial resources of physicians, particularly those whose support systems are limited.”

Compliance with the Red Flags Rule requires physicians to develop a plan to detect “red flags.”  This will require significant resources to address the unique nature of each practice.  A plan for a physician who serves in a rural area in which patients are well-known will be different from one for a physician in a large group in an urban area.  Once a plan is developed, it has to be implemented and maintained.  “Red flags” must be detected and appropriate responses must be made.  Correspondingly, the time required to comply with the Red Flags Rule will necessarily detract from the attention physicians are able to give their patients. 

About CMSS
Founded in 1965, CMSS was created to provide an independent forum for the discussion by medical specialists of issues of national interest and mutual concern.  Today, CMSS represents thirty-four societies with an aggregate membership of more than 650,000 US physicians. Its main purpose is to provide a forum for collaboration to influence policy, medical education and accreditation from a broad, cross-specialty perspective. CMSS is the unified voice for specialty societies established to improve the United States’ healthcare system and health of the public. For more information visit CMSS at www.cmss.org.

###