Executive Summary
The Telephone Consumer Protection Act (“TCPA”) is a major litigation risk for hospitals and health care providers who use text messages, artificial or pre-recorded voice messages and other automated dialing technologies to reach patients. Hundreds of class action lawsuits have been filed in recent years seeking damages that amount to millions of dollars in TCPA violations, with the largest TCPA settlement to date reaching upwards of $32 million. New regulations remove key exemptions that previously served as safeguards against TCPA liability. In response, hospitals and health care providers need to revise hospital admission forms to avoid liability and potentially catastrophic penalties under the TCPA.
Discussion
The TCPA is a federal law intended to protect consumers from unwanted telephone calls made for various purposes to their residential and cellular telephones. Absent the “prior express consent” of the called party, the TCPA generally prohibits callers from using 1) an artificial or pre-recorded voice message or automated telephone dialing systems (“auto-dialers”) to make calls or text messages to cellular telephone numbers; and 2) an artificial or pre-recorded voice message to make calls to residential telephone numbers. (See 47 U.S.C. § 227 et seq.)
The TCPA provides consumers with a private right of action for violations and statutory damages of up to $500 per call or message and up to $1,500 per knowing or willful violation. (See 47 U.S.C. § 227(b)(3).) The number of private class action lawsuits filed under the TCPA is rising at an alarming rate, many of which arise from the failure of businesses to collect “prior express consent.” In a recent New York case, a federal judge approved a $9 million settlement between a debt collection company and a class of plaintiffs who alleged that the company violated the TCPA by placing pre-recorded calls to their cell phones without their consent. (See Adams v. AllianceOne, Inc., No. 08-CV-248-JAH WVG, 2011 WL 2066617 (S.D. Cal. 2011).)
Further, new regulations from the Federal Communications Commission (“FCC”) (available here) went into effect in October 2013 that narrows two key exemptions that previously served as safeguards against liability.
The new regulations:
- Eliminated the “established business relationship” exception. A business can no longer avoid TCPA liability for otherwise prohibited telemarketing calls to residential landlines if the business has an “established business relationship” with the consumer.
- Amended the “prior express consent” exception to require a written agreement. A business will only qualify for the “prior express consent” exception if the consumer has physically or electronically signed a written agreement permitting future advertising or telemarketing calls to be made using: 1) artificial or pre-recorded voice messages to designated cellular or residential phones; or 2) auto-dialed calls to designated cellular phones. (See 47 C.F.R. § 64.1200(a)(2)-(3).)
When a patient registers in the hospital, the patient signs waiver forms authorizing the hospital to obtain and share the patient’s information with his or her health care providers. Such waivers permit the hospital and other health care providers or their agents to contact the patient for various purposes, including calls made by the providers (or their respective collection agencies) to collect payment for services rendered.
The FCC no longer recognizes the mere release of one’s phone number to a business as constituting “prior express consent” to any future telephone calls. (See 47 C.F.R. § 64.1200(f)(8).) Under the FCC’s new interpretation, the hospital should receive “prior express written consent” from the patient in which the patient clearly and unambiguously agrees to receive artificial or pre-recorded voice or auto-dialed calls to designated cellular or residential telephone numbers for the purposes of telemarketing, debt collection or other purposes.
The courts are split over whether artificial or pre-recorded voice or auto-dialed calls made for debt collection purposes require consent to be granted specifically to a third-party debt collector. However, the burden of demonstrating “prior express consent” rests with the party defending a TCPA claim. (See Mais v. Gulf Coast Collection Bureau, Inc., No. 11-61936-CIV, 2013 WL 1899616 (S.D. Fla. May 8, 2013) (holding that the provision of a patient’s cellular phone number on hospital admission forms did not constitute “prior express consent” to a third-party debt collector, but the health care providers were not held vicariously liable for debt collector’s TCPA violations).)
Next Steps/Practical Takeaways
As the number of TCPA lawsuits grows at an alarming rate, hospitals and health care providers must be aware of the severe consequences that are risked by the simple act of contacting patients by phone without obtaining proper patient consent. Hospitals need to adopt elements of the new FCC rule into patient admissions procedures to avoid liability and potentially catastrophic penalties under the TCPA.
Debt collection:
- Hospital admission forms should be amended to acknowledge that the patient is providing “prior express consent” for the hospital, its providers and agents, including debt collectors, to place calls to the patient’s designated cellular or residential phones using any type of artificial or pre-recorded voice or auto-dialer technologies for any permissible purpose.
Telemarketing and advertisements via artificial or pre-recorded voice and auto-dialer technology:
- Providers must obtain a written agreement, including the signature of the patient, the telephone number to which the patient authorizes calls to be made and a “clear and conspicuous disclosure” informing the patient signing that:
- The agreement authorizes the receipt of future calls containing artificial or pre-recorded voice or auto-dialed telemarketing messages on behalf of a specific advertiser; and
- The consent is not a condition of purchase. (See 47 C.F.R. § 64.1200(f)(8).)
Providers should maintain evidence of each patient’s written consent for at least four years, which is the federal statute of limitations for TCPA actions.
If you have questions regarding the TCPA or would like additional information on updating your patient consent procedures, please contact:
- René Remek Savarise at 502.568.9365 or rsavarise@hallrender.com;
- Lea Lockhart at 317.977.1469 or llockhart@hallrender.com; or
- Your regular Hall Render attorney.
Special thanks to Hannah K. Brown, Law Clerk, for her assistance in preparing this article.
Please visit the Hall Render Blog at http://blogs.hallrender.com for more information on topics related to health care law.
