Being on the lookout for potential waste, abuse, and fraud due to identity theft is part of maintaining healthcare compliance. Red flag regulations for the healthcare industry assist your company in safeguarding your patients, employees, and financial stability against possible medical identity theft. This article breaks down the red rules in healthcare and outlines the policies, practices, and training your company may use to comply with them.

Red Rules in Healthcare: What Are They?

An organization is always vulnerable to identity theft when handling sensitive information such as names, credit card numbers, insurance coverage or enrollment details, or Social Security numbers. For instance, some medical identity thieves use insurance details to falsely submit claims for products or services to Medicare or Medicaid. False information may also be entered into electronic medical records (EMRs) or fake EMRs may be created in the identities of victims as a result of identity theft.

Red flags or specific signs can alert you to suspicious activity. Red flags are indicators of fraud, waste, and abuse brought on by identity theft and other illegal activities. The Red Flags Rule, also known as the Red Flag Program Clarification Act of 2010, requires certain healthcare providers and organizations to set up and adhere to procedures that identify and stop identity theft. In the healthcare industry, red standards apply to organizations that:

  • Credit reports involving credit transactions should be gathered or used.
  • Make payments to someone or on their behalf when they promise to reimburse you.
  • Inform credit reporting agencies about credit transactions.

 

In the healthcare industry, red rules help compliance officers and others identify the warning signs of possible misconduct, such as:

  • Records of protected health information (PHI) that contain fictitious addresses, phone numbers, or Social Security numbers
  • Unusual use or behavior using patient account data
  • A credit reporting agency’s warnings
  • Alerts regarding potential identity theft from law enforcement, patients, or other victims

 

Red guidelines also go beyond the Health Insurance Portability and Accountability Act to protect PHI’s privacy and security by ensuring:

  • Details about a credit card
  • Details of an insurance claim
  • Additional tax identification numbers, such as Social Security numbers
  • Background checks of employees and service providers

How to Maintain Compliance with Healthcare Red Flag Regulations in Your Organization

Financial or legal fines may follow noncompliance with the healthcare red flags regulations. For instance, Lafourche Medical Group in Louisiana was ordered to pay $480,000 by the U.S. Department of Health and Human Services in December 2023 for disclosing a phishing event that happened using an employee email address. Over 34,000 patients’ PHI was compromised.

Therefore, putting rules and processes in place to guard against medical identity theft is advantageous to a company. In particular, these red guidelines enable people to recognize and react to warning signs.

The following components should be included in policies and processes for handling red flags in healthcare:

  • Find out which warning signs might apply to your company, practice, or organization.
  • Create identification standards to find warning signs.
  • Implement financial transaction procedures like identity verification and patient contact information validation.
  • Assign a staff person to look into warning signs.
  • Establish a protocol for handling red flags that includes specifications for document collection, incident reporting, and prompt and appropriate action.
  • Establish a procedure that allows the board of directors, compliance officer, compliance team, or other executives to examine and approve the company’s red flag policy.
  • Every year, or more often if possible, review all red flag rules.
    Include red flag guidelines in routine employee training.

 

Leave a Reply

Your email address will not be published. Required fields are marked *