By Laura J. Lowenstein, Esq.
On September 29, 2014, the United States Court of Appeals for the 11th Circuit decided a case brought against a collection agency that materially impacts every physician trying to collect past due medical debts for care provided in a hospital setting. The case, titled Mark S. Mais v Gulf Coast Collection Bureau, Inc. was filed by a patient against a hospital-based radiologist and its debt collection agency who claimed that the defendants violated the Telephone Consumer Protection Act of 1991 (the “TCPA”) by making auto-dialed or pre-recorded calls to him at his cell number. The holding of the Appellate Court in favor of the last-remaining collection agency defendant rested squarely on a 2008 FCC Ruling (see In re Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991) and it is this aspect of the case’s holding, as opposed to the minutiae of the federal regulatory collection laws, that I want to highlight.
The decisive factor in determining if the defendant collection agency violated the TCPA was whether the patient was deemed to have given “prior express consent” (as interpreted in the 2008 FCC Ruling) to be contacted at his cell phone number. The pertinent facts being that the patient-plaintiff, Mark Mais, went to an emergency room in Florida with his wife, Laura. On behalf of her husband, Laura completed the hospital admissions forms and provided the admitting nurse with her husband’s personal and insurance information, including his cell number. As part of the registration process, Laura signed a form termed Conditions of Admission that stated (a) she acknowledged receipt of the hospital’s Notice of Privacy Practices; (b) that healthcare professionals involved in the care received may release the patient’s healthcare information for purposes of “treatment, payment or healthcare operations;” and (c) that services provided by hospital-based physicians are rendered by independent contractors that will bill the patient separately. The Notice of Privacy Practices also stated that the hospital may use and disclose health information (a) about the patient to bill and collect payment from the patient; and (b) to “business associates” with whom the hospital is contracted so that they can “perform [the] agreed upon service[s]” and bill the patient for such services.
After being admitted to the hospital through the emergency department, Mr. Mais was treated by a hospital-based radiology provider. The radiologist’s biller electronically retrieved the cell number and demographic information for Mr. Mais from the hospital and proceeded to bill him. Mr. Mais failed to pay his bill and his account was forwarded to Gulf Coast Collection Bureau, Inc. (Gulf Coast), a collection agency contracted by the radiologist’s parent company. Gulf Coast makes it a practice to use predictive automated dialers which, in the instant case, caused the cell phone of Mr. Mais to be called between 15-30 times, with four messages being left about the debt. Plaintiff Mais then brought an action alleging such calls violated the TCPA because Gulf Coast did not have his “prior express consent” to make such calls to his cell number.
The case ultimately came up on interlocutory appeal and resulted in a decision that profoundly impacts hospitals and the independent medical providers they contract with for care. First, the Appellate Court held that the 2008 FCC Ruling did in fact apply to medical debt even though the consent exception was originally addressed in the context of consumer credit. Furthermore, medical patients who fill out admissions forms like those of the hospital in this case should expect the information contained therein to be used for billing and collection calls. With that in mind, the Appellate Court then focused its attention on addressing whether the 2008 FCC Ruling exception applies in this scenario since it states that “prior express consent is deemed to be granted only if the wireless number was provided by the consumer to the creditor.” The facts at hand show that Plaintiff Mais (through his wife) provided his cell number to the hospital only and the hospital was not the creditor on this debt.
When examining this issue, the Appellate Court clarified the question as this: Does a called party expressly provide his cell number to a creditor when he authorizes an intermediary (i.e., the hospital) to disclose his number to the creditor for debt collection? To this question, the Appellate Court answered in the clear affirmative and remanded the case back to the district court for summary judgment to be entered in favor of Gulf Coast by holding that the patient’s wife, Laura, did indeed “provide” his cell number to the creditor when she granted the hospital permission to disclose it in connection with billing and payment. Thus, the Court reasoned, consent could be obtained and conveyed through an intermediary for purposes of satisfying the prior express consent exception to the 2008 FCC Ruling.
So… what should hospitals and providers take away from this decision? The fact that they must review and ensure that the hospital admissions paperwork, inclusive of registration forms and their Notice of Privacy Practices, provides for the dissemination of health information to all business associates with which it is contracted, including non-facility medical providers, (a) for the purposes of rendering care or the job they have been asked to do and (b) so that they may bill, and collect from, the patient for any such work. Taking a step back, implicit in this is the fact that providers need to make sure that they have current business associate agreements in effect with all hospitals at which they take call or provide care and that the term “health information” in all such hospital documentation where they render such services is defined as broadly as possible so as to include all demographic and contact information for the patient.
This is an important case that serves to support responsible efforts to collect on legitimate medical debt accounts. While patients, hospitals and medical providers may find the paperwork involved in emergency department admissions to be a nuisance, this case proves that it is required to ensure that medical providers are equipped with the legal framework and protections needed to pursue legitimate debts owed for the medical care they rendered to patients in good faith. To this end, every hospital must review their paperwork and internal admission policies and practices on an ongoing basis to ensure that every provider that steps foot in their door to care for their patients has some basic assurances that they have the legal means to get paid for the important job they have been asked to do.
For more information or a free consultation to discuss how CRM can assist with managing your collection needs, please visit us online at www.crmcollect.com or call us toll-free at 1-844-ARREARS (277-3277).