FCC PROVIDES ADDITIONAL CLARITY ABOUT RULES UNDER THE TELEPHONE CONSUMER PROTECTION ACT

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1 August 3, 2015 FCC PROVIDES ADDITIONAL CLARITY ABOUT RULES UNDER THE TELEPHONE CONSUMER PROTECTION ACT The Issue: On July 10, the Federal Communications Commission (FCC) released an order addressing a number Contact NAME, TITLE, at (202) 626-XXXX or EMA of important issues under the Telephone Consumer Protection Act (TCPA). The order: The Issue: Confirms that, when a patient provides his or her telephone number to a healthcare provider, the Arial patient 12pt gives prior express consent for healthcare-related calls and text messages subject to the Health Insurance Portability and Accountability Act of 1996 (HIPAA), provided that those calls and texts are made by a HIPAA-covered entity or its business associates, and that such Our consent Take: may be obtained through a third party when a patient is medically incapacitated. Arial 12pt Provides that certain types of free-to-end-user healthcare-related calls are exempt from the TCPA. What You Can Do: Arial 12pt Adopts a broad definition of automatic telephone dialing system, meaning that prior express consent will be required for practically all calls and texts to wireless numbers, with the exception of certain categories of free-to-end-user healthcare-related and financial messages. Further Questions: Finds that, when a wireless telephone number has been reassigned to a different subscriber, a The caller Issue: is liable for TCPA violations arising out of calls made to the reassigned number, even if Arial the caller 12pt had sufficient prior express consent from the previous subscriber, and does not know that the wireless number has been reassigned. (The FCC did exempt from TCPA liability the first call to a reassigned wireless number.) Our Take: The FCC s order provides helpful clarity. Other portions of the order, including the FCC s broad definition of automatic telephone dialing system and its statement that callers are responsible for TCPA violations arising from calls and texts to transferred wireless numbers, may require modifications to existing policies and procedures. What You Can Do: AT A GLANCE Share this advisory with your legal department, your patient accounts team and your communications, marketing and public relations teams. Update and implement your policies and procedures to comply with the revised rules. Further Questions: Please contact Lawrence Hughes, assistant general counsel, at (202) or 2015 American Hospital Association

2 August 3, 2015 FCC PROVIDES ADDITIONAL CLARITY ABOUT RULES UNDER TELEPHONE CONSUMER PROTECTION ACT BACKGROUND On July 10, 2015, the Federal Communications Commission (FCC) released a Declaratory Ruling and Order (order) resolving some important issues under the Telephone Consumer Protection Act (TCPA), including some raised in a number of petitions for declaratory ruling filed by business groups, individual companies, and others, including the American Association of Healthcare Administrative Management (AAHAM). Of particular relevance for healthcare providers, the order confirms that, when a patient provides his or her telephone number to a healthcare provider, the patient gives prior express consent for healthcare-related calls and text messages subject to the Health Insurance Portability and Accountability Act of 1996 (HIPAA), provided that those calls and texts are made by a HIPAA-covered entity or business associates acting on its behalf. The order also provides that certain types of free-toend-user healthcare-related calls are exempt from the requirements of the TCPA. AT ISSUE The TCPA (47 USC sec. 227) was enacted in 1991 to address concerns relating to telemarketing and solicitation practices. It regulates: 1. calls to wireless telephones; 2. text messages to wireless telephones; 3. telemarketing calls to residential telephones; and 4. advertising facsimiles. The TCPA is essentially a strict liability statute: A person or company can be found liable under the TCPA even if they made a good faith effort to comply, but nevertheless violated the statute. The TCPA creates a private right of action and class action lawsuits frequently are brought under the statute. The TCPA imposes statutory damages of $500 per violation, which can be increased up to $1,500 per violation if a court finds that the violation was willful or knowing. Under the TCPA, the FCC is designated as the federal agency specifically responsible for rulemaking to implement its statutory requirements. In a previous Legal Advisory, the AHA reported on new rules adopted by the FCC in a Report and Order issued on American Hospital Association 1

3 February 15, Those rules exempted from the FCC s regulations under the TCPA calls that delivered a healthcare message made by or on behalf of a HIPAA covered entity or its business associate, as defined in the HIPAA Privacy Rule at 45 CFR ). Under the February 2015 rules, such healthcare-related calls are exempt from: The FCC s requirement of written consent for autodialed telemarketing calls and text messages to wireless telephones. While such healthcare-related calls and text messages to wireless telephones (including both telemarketing and informational calls and texts) require prior express consent, that consent need not be in writing. The FCC s consent, identification, time-of-day, opt-out and abandoned call rules applicable to artificial voice and prerecorded message calls to residential telephones. The healthcare-related calls that are exempted from the FCC rules, however, remain subject to the HIPAA requirements and restrictions. AS IT STANDS Clarification of What Constitutes Prior Express Consent for Healthcare Calls and Text Messages In the order, the FCC clarified that, when a patient provides a wireless telephone number to a healthcare provider, he or she is giving prior express consent to receive healthcare-related calls subject to HIPAA from a HIPAA-covered entity or business associate acting on its behalf, if the call is within the scope of the consent given, and absent instructions to the contrary. The FCC stated that, in order for a call to be within the scope of the consent given, the call must be closely related to the purpose for which the telephone number was originally provided. The FCC offers an example: If a patient provided his phone number upon admission to a hospital for scheduled surgery, then calls pertaining to that surgery or follow-up procedures for that surgery would be closely related to the purpose for which the telephone number was originally provided. The FCC s statements indicate that, to the extent that a healthcare provider intends to rely upon a patient s provision of a wireless telephone number as prior express consent for calls and texts to that number, the provider should confirm, in connection with each hospital admission or appointment, that the patient has provided his or her telephone number to the provider (in connection with completing a patient data form, etc.). Another option would be to build a broader written consent into the admission process, which discloses to the patient that the provider may call or text the telephone number provided by patient in connection with the current admission and any future admissions. American Hospital Association 2

4 In addition, the FCC clarified that, where a patient is unable to consent because of medical incapacity, prior express consent to make healthcare calls subject to HIPAA may be obtained from a third party during that period of incapacity (e.g., by providing the patient s telephone number to the healthcare provider). The FCC, however, stressed that any consent provided through a third-party is no longer valid once the period of incapacity ends, and the provider must obtain the prior express consent of the patient in order to continue making healthcare calls to the patient s wireless number. Certain Categories of Free-to-End-User Calls and Texts Exempted from TCPA s Prior Express Consent Requirement In the order, the FCC also, in part, granted a request from AAHAM to exempt certain free-to-end-user healthcare calls and text messages from the TCPA s prior express consent requirement. The FCC restricts the exemption to calls for which there is exigency and that have a healthcare treatment purpose, including specifically: Appointment and exam confirmations and reminders; Wellness checkups; Hospital pre-registration instructions; Pre-operative instructions Lab results; Post-discharge follow-up intended to prevent readmission; Prescription notifications; and Home healthcare instructions. The FCC stated that HIPAA privacy rules shall control the content of the informational message where applicable, such as where the message attempts to relate information of a sensitive or personal nature. The FCC also stated that the exemption does not apply to any calls that include telemarketing, solicitation, or advertising content, or which include accounting, billing, debt-collection, or other financial content. The FCC imposed a number of conditions upon calls falling within the exemption, including that voice calls and text messages: Must be sent, if at all, only to the wireless telephone number provided by the patient. Must state the name and contact information of the healthcare provider (for voice calls, these disclosures would need to be made at the beginning of the call). Be strictly limited to the purposes (listed above); They must not include any telemarketing, solicitation or advertising; may not include accounting, billing, debt-collection or other financial content; and must comply with HIPAA privacy rules. American Hospital Association 3

5 Must be concise, generally one minute or less in length for voice calls and 160 characters or less in length for text messages. A healthcare provider may initiate only one message (whether by voice call or text message) per day, up to a maximum of three voice calls or text messages combined per week from a specific healthcare provider. A healthcare provider must offer recipients within each message an easy means to opt out of future such messages. Voice calls that could be answered by a live person must include an automated, interactive voice- and/or key press-activated opt-out mechanism that enables the call recipient to make an opt-out request prior to terminating the call. Voice calls that could be answered by an answering machine or voice mail service must include a toll-free number that the consumer can call to opt out of future healthcare calls. Text messages must inform recipients of the ability to opt out by replying STOP, which will be the exclusive means by which consumers may opt out of such messages. A healthcare provider must honor the opt-out requests immediately. In addition, the FCC reiterated that [t]he exemption applies to robocalls and texts to wireless numbers only if they are not charged to the recipient, including not being counted against any plan limits that apply to the recipient (e.g., number of voice minutes, number of text messages). Broad Definition of Automatic Telephone Dialing System In the order, the FCC addressed a number of petitions requesting clarification of what constitutes an automatic telephone dialing system (which the FCC calls an autodialer in the order) under the TCPA. What is and what is not an autodialer is a critical issue under the statute, because the statute prohibits making any call or sending any text message to a wireless telephone number using an autodialer, unless the caller has obtained the prior express consent of the called party. The TCPA defines automatic telephone dialing system as equipment which has the capacity: (A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers. The basic functions of an autodialer are to dial numbers without human intervention, and to dial thousands of numbers in a short period of time. Prior to the issuance of the order, many businesses addressed the TCPA s prohibition on autodialed calls to wireless phones by: Making those calls using equipment that could not, at the time of the calls, store or produce telephone numbers to be called, using a random or sequential number generator, and dial such numbers ; and American Hospital Association 4

6 Manually dialing calls. That commonsense interpretation was supported by a number of federal district court decisions, and, to some extent, by the FCC s prior statements regarding autodialers. In the order, the FCC adopts a broad definition of autodialer that, as a practical matter, potentially includes virtually all modern telephone equipment with the exception of a rotary telephone. According to the FCC, the definition of autodialer under the TCPA includes not only equipment that currently can perform the functions identified in the statute, but also any equipment that potentially could perform those functions (including through the addition of software), even if the equipment currently cannot perform those functions. As a practical matter, almost any modern telephone equipment (including the telephone systems used by businesses, and iphones) potentially could be modified through the addition of software (or an app ) to perform the functions of an autodialer. Although the FCC notes that, in order for equipment to constitute an autodialer, there must be more than a theoretical potential that the equipment could be modified to satisfy the autodialer definition, the FCC does not explain what theoretical potential means. It also is important to note that the TCPA prohibits the use of equipment that constitutes an autodialer to make calls and send texts to wireless phones without prior express consent, even if the call is manually dialed. Callers Liable for TCPA Violations Arising out of Calls and Texts to Reassigned Wireless Numbers In the order, the FCC clarified that the TCPA requires the consent not of the intended recipient of a call, but instead the consent of the current subscriber (or a nonsubscriber customary user of the phone). The FCC recognized that wireless numbers are frequently reassigned (including from a former subscriber who previously gave the caller prior express consent to a new subscriber who has not), but found that, under the TCPA, callers have the obligation to institute new or better safeguards to avoid calling reassigned wireless numbers, and must ensure that they have the prior express consent of the party that actually receives the call or text. The FCC stated, however, that callers who make calls without knowledge of reassignment and with a reasonable basis to believe that they have valid consent to make the call should be able to initiate one call after reassignment as an additional opportunity to gain actual or constructive knowledge of the reassignment and cease future calls to the new subscriber. American Hospital Association 5

7 NEXT STEPS Hospitals will want immediately to update and implement policies and procedures to ensure proper compliance with these revised FCC rules. All staff whose responsibilities might be impacted by the revised rules should be promptly informed of the rule changes and how they change existing procedures related to patient communications, marketing and public relations. FURTHER QUESTIONS For questions about the revised FCC rules, contact Lawrence Hughes, AHA assistant general counsel, at (202) or American Hospital Association 6

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