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My week is not complete unless I receive at least one call from an indignant if not irate hospital CFO.

But to be clear, the rage and frustration is not actually directed at me – it is directed at the message I share:

“Yes, the TCPA applies to hospitals.”

Admittedly, the healthcare CFO’s wrath is easy enough to understand. After dealing with almost 15 years of compliance challenges including HIPAA regulations, the overhaul of our third-party payer system, the intricacies of the Patient Protection and Affordable Care Act, the advent of ICD-10 requirements, and (for nonprofit hospitals) 501(r) challenges presented by the IRS, any right minded member of a hospital’s C suite has a very difficult time accepting the message that they can no longer call their patients.

That’s an exaggeration, made to drive home a very painful point of law: Stated simply, unless and until your hospital understands and accepts that the Telephone Consumer Protection Act (TCPA) applies to your operation, it is in your best interest to stop calling your patients using an autodialer or leaving them prerecorded messages by way of their cell phones. Here’s why:

The TCPA was passed by Congress in 1991 to curtail excessive solicitation calls to consumers made by telemarketers with whom the consumers had no existing business relationships. Specifically, the Act does so by restricting the use of automatic dialing systems, artificial or prerecorded voice messages, SMS text messages received by cell phones, and the use of fax machines to send unsolicited advertisements.

However, notwithstanding the very specific privacy protections Congress intended to achieve regarding telemarketing practices, the language used by Congress to bestow this protection on consumers did not place limits on the party making the calls to the consumers by way of the cell phones. Instead it placed limits on the technology used to make the calls to the consumers’ cell phones, specifically automatic telephone dialing systems (ATDS) and prerecorded message technology. No regard was given to the purpose of the call, the identity of the calling party, or the relationship between the calling party and the consumer.

As a result, even hospitals that use an ATDS or leave prerecorded messages on a patient’s cell phone must comply with the compliance requirements of the TCPA. No exceptions. No excuses.

Since the TCPA regulations’ effective date, litigation has skyrocketed. Consumers and their attorneys seeking $500 in monetary damage for each call made in violation of the statute (or $1500 for each call made willfully in violation of the statute), have brought thousands of lawsuits against members of the credit and collection industry, and most recently the healthcare community. According to ACA International, the Association of Credit and Collection Professionals, TCPA law suits increased 560% between 2010 and 2014. Typically pled as a class action, TCPA suits often result in damage awards in the multimillion dollar range, crippling the defendant organizations. Few have appropriate insurance coverage, and are often left uninsurable against future TCPA liability when they fall victim.

For those of you who might still believe hospitals are exempt, pay close attention to the recent class action lawsuit filed against Prospect Medical Group, a California-based hospital chain. Prospect Medical Group represents one of the first healthcare providers sued since the Federal Communications Commission clarified Telephone Consumer Protection Act language last July concerning auto-dialing cell phones, consent-to-call and calling wrong numbers.

As reported by Credit and Collection Risk, the class-action lawsuit alleges Prospect Medical, a hospital located in Culver City, Calif., used an automated dialer to call patient Donna Ratliff on her cell phone in order to collect a debt without her express consent to do so. In a statement, the company said that it follows necessary practices to obtain mobile phone consent.

“All of our patients are asked to sign an irrevocable authorization permitting our hospitals to contact them via telephone – including, specifically, via cellphone – in their efforts to collect outstanding debt,” according to the statement.

Only time will tell if the plaintiff’s claim that the consent did not apply to the particular hospital encounter or was otherwise invalid will survive a motion to dismiss or summary judgment. It also remains to be seen if a class will even be certified.

In light of the uncertainty in the law and the possibility of multimillion dollar damage awards, my best advice for hospitals is to take immediate steps to adopt clear policies and procedures detailing how they will obtain the express consent to call their patients’, guarantors’ and other responsible parties’ cell phones using an automatic telephone dialing system for each encounter or payment obligation.

For additional information about how the TCPA impacts hospitals and ambulatory facilities please feel free to contact me directly at rozanne.andersen@ontariosystems.com.

 

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Disclaimer: Ontario Systems is a technology company and provides this blog article solely for general informational and marketing purposes. You should not rely on the content of this material for any other purpose or as specific guidance for your company. Ontario Systems’ advice, services, tools and products described herein do not guarantee compliance with any law or industry standard. You are ultimately responsible for your own company’s actions and compliance efforts. Because everyone’s situation is different, you must consult your own attorneys, accountants, and/or other advisors to obtain specific advice on your company’s compliance, legal, tax, regulatory and/or other business needs. Despite Ontario Systems’ efforts to provide current and up-to-date information, you need to recognize that the information contained herein may become outdated quickly and may contain errors and/or other inaccuracies.

© 2021 Ontario Systems, LLC. All rights reserved. Information contained in this document is subject to change. Reproduction of this publication is not permitted without the express permission of Ontario Systems, LLC.

Posted by Rozanne Andersen

Rozanne Andersen serves as Ontario Systems’ Vice President and Chief Compliance Officer. She is a licensed attorney and 30+ year veteran and advocate of the banking, credit, and collection industries. She presently leads Ontario Systems’ compliance software design initiatives, directs the company’s corporate CFPB compliance efforts, functions as a thought leader for the industry, and leads the company’s product development initiatives to support compliance with consumer financial laws and regulations. In 2020, Rozanne received an international Compliance Officer of the Year award from Women in Compliance. As former general counsel, director of government affairs, and CEO of ACA, Rozanne is thrilled to combine her legal and government affairs work with her new legal specialty, compliance technology innovation. Rozanne can be reached at Rozanne.andersen@ontariosystems.com.
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