The ADA has been dealing with the Federal Trade Commission (FTC) concerning the ruling from the FTC called the “RED FLAG RULE”, which will go into effect on May 1, 2009. The ADA has challenged (and continues to challenge) the Red Flag Rule on several fronts. In November of 2008, the ADA wrote to the FTC commenting on the Rules and requesting that dentists be given an exemption. ADA made three specific points in the letter to the FTC. First, it was argued that including dentists within the definition of a “creditor” who needs to comply with the Red Flag Rule is contrary to the legislation that the Rule purports to implement. Second, ADA raised a legal argument that the Rules were not adopted in accordance with the requirements of the Federal Administrative Procedures Act. Third, ADA argued that imposing the Rule on dentists represents unsound public policy and would impose an undue burden on dentists if they are required to comply.

Earlier in March, the ADA also had a telephone conference with the FTC staff where ADA President, Dr. Findley, explained that enforcing the Rule in the vast majority of practices, where they are not needed would place a financial burden on dentists who are already feeling the effects of the bad economy. It was also pointed out to the FTC that the Rule could raise issues under the HIPAA privacy regulations, thus requiring some harmonization between the Red Flag Rule and HIPAA. The ADA continues to urge the FTC to not enforce the Rules against dentists. The purpose behind the Rules is to help stop the growing problem of identity theft, which all of us can agree has become very serious. However, applying the Rule to dentists “dismally flunks a cost benefit analysis” according to our best calculations. Even if we take the FTC staff at its word that a dentist will likely need only implement a streamlined and less complex program, the total cost to dental offices as a whole will undoubtedly cost tens of millions of dollars in the aggregate in terms of lost time and expense. The ADA materials/documents are being immediately mailed to every TDA dentist, and will be further discussed in detail in the TDA TODAY, and it will also be available on the TDA Website, member’s only side. It is estimated that the cost for the average dental office will be about $600.00. When multiplied by the approximately 130,000 U.S. dental offices, the loss amounts to nearly $80 million.

The documents:

This is happening so fast, that TDA only received this notice on April 2, 2009.

Nobody is happy about the FTC action. By the definition of “creditor” in law and by regulation, if you send statements to your patients, you are defined as a “creditor” whether you like it or not, therefore you must adopt the Red Flag mandates.

S. Jerry Long, D.D.S.; ADA-15^th District Trustee

Mark Peppard, D.D.S.; ADA Delegate, TDA Vice President