Antitrust Law Daily Wrap Up, PRIVACY—11th Cir.: “Prior express consent” exception to TCPA applies to medical debt collection, (Sep 30, 2014)

By Greg Hammond, J.D.

A medical debt collector did not violate the Telephone Consumer Protection Act of 1991 (TCPA) by contacting a patient through autodialed or prerecorded calls. In reversing and remanding the case to enter summary judgment in favor of the collector, the Eleventh Circuit U.S. Court of Appeals determined that the patient—through his wife—provided prior express consent for the hospital to provide his phone number to third party billing and collection companies (Mais v. Gulf Coast Collection Bureau, Inc., September 29, 2014, Marcus, S.).

Background. Mark Mais received emergency room treatment in a Florida Hospital in 2009, and his wife completed and signed admissions documents on his behalf. Mais—through his wife—agreed to the hospital’s “Notice of Privacy Practices,” which stated: “the hospital and the physicians or other health professionals involved in the inpatient or outpatient care [may] release [Plaintiff’s] healthcare information for purposes of treatment, payment or healthcare operations,” including “to any person or entity liable for payment on the patient’s behalf in order to verify coverage or payment questions, or for any other purpose related to benefit payment.” The notice also stated that the hospital “may use and disclose health information about [Plaintiff’s] treatment and services to bill and collect payment from [Plaintiff], [his] insurance company or a third party payor.”

After receiving between 15 and 30 calls, and four messages, Mais filed a class action complaint against Gulf Coast Collection Bureau, Inc. and Florida United Radiology, L.C., alleging that their collection activities violated the TCPA. The district court first determined that the 2008 FCC Ruling was inconsistent with the TCPA, and found that Gulf’s listing of Mais’ cell phone number on the Hospital admissions documents alone did not evince prior express consent to receive autodialed or prerecorded calls. In the alternative, the court found that the FCC Ruling, which concluded that “the provision of a cell phone number to a creditor, e.g., as part of a credit application, reasonably evidences prior express consent by the cell phone subscriber to be contacted at that number regarding the debt,” was inapplicable to medical settings. Consequently, the district court granted partial summary judgment in favor of Mais, and Gulf and Florida United sought interlocutory appeal.

The district court certified four questions to the court of appeals: (1) Whether a district court has jurisdiction under the Hobbs Act to review an FCC order in a TCPA case when the plaintiff does not challenge the validity of that order; (2) If the district court has such jurisdiction, whether the FCC’s pronouncements on the issues of “prior express consent” and vicarious liability are entitled to deference under Chevron; (3) If the district court lacks such jurisdiction, whether the FCC’s opinion on “prior express consent” is limited to the consumer credit transaction arena such that it does not apply to the medical care setting; and (4) Whether a medical provider’s consent to use and disclose patient information, including phone numbers, under the Health Insurance Portability and Accountability Act (HIPAA) equates to “prior express consent” for affiliates and agents of that provider to call the patient on his cell phone for debt collection purposes using an automated telephone dialing system.

Jurisdiction. The appellate court first determined that the district court exceeded its jurisdiction when it declared the 2008 FCC Ruling to be inconsistent with the TCPA. The court specifically took notice of the Hobbs Act, which expressly gives federal appellate courts “exclusive jurisdiction to enjoin, set aside, suspend (in whole or in part), or to determine the validity of” such FCC orders. Consequently, it was improper for the district court to determine the validity of the FCC Ruling in this case.

Scope of FCC Ruling. Turning to the lower court’s alternate holding, the appellate court considered whether the facts and circumstances of this case fall outside the scope of the 2008 FCC Ruling. The lower court found that the Ruling did not apply to medical debt in this case, because the FCC addressed consent only in the context of “consumer credit.” However, the appellate court concluded that the FCC’s general language “sends a strong message that it meant to reach a wide range of creditors and collectors, including those pursuing medical debts.”

The court also noted that if a form explicitly states that provided information will be used for payment and billing, a patient has reason to expect collection calls, similar to retail consumers. Additionally, it found that: (1) the TCPA does not prohibit a caller from obtaining consent through an intermediary; (2) by signing the hospital admissions forms, Mais’ wife agreed to allow the hospital to transmit Mais’ health information to Florida United for billing; (3) the wireless telephone number was provided in satisfaction of the prior express consent exception; and (4) the term “health information,” as used in the hospital admissions forms, includes Mais’ cell phone number, as it was part of the record from his visit, was contact information related to billing, and is supported by statutory definitions found in the HIPAA.

The case number is 13-14008.

Attorneys: Deepak Gupta (Gupta Beck PLLC) for Mark S. Mais. Ernest H. Kohlmyer, III (Urban Thier Federer & Chinner, PA) for Gulf Coast Collection Bureau, Inc.

Companies: Gulf Coast Collection Bureau, Inc.

Cases: Privacy AlabamaNews FloridaNews GeorgiaNews