Telemarketing: HIPAA Can Reverse the Charges Under the TCPA

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The Telephone Consumer Protection Act (TCPA) generally limits automatically dialed and prerecorded telemarketing calls to wireless and residential phones. In the past, healthcare providers and other "advertisers" could rely on an established business relationship (such as a previous purchase) to circumvent the need to obtain a consumer's written consent to receive certain telemarketing or advertising calls. Beginning October 16, the "established business relationship" exemption for prerecorded telemarketing calls will be eliminated from the TCPA. However, the good news for healthcare providers is that the Federal Communications Commission (FCC) retained the exempt organization exception and also adopted an exemption in this rule for certain automatically dialed and prerecorded healthcare-related calls by or on behalf of a covered entity or its business associates regulated under HIPAA.

The FCC's rules, published on June 11, 2012, for auto-dialed and prerecorded calls made to wireless numbers or to a landline in certain limited circumstances (e.g., call to a patient room of a hospital or other healthcare facility) (Restricted Lines) will now allow such calls if (1) the caller has the express prior consent of the recipient of the call (including prior verbal consent); and (2) the call does not introduce an advertisement and/or constitute telemarketing.

If the call, however, introduces an advertisement and/or constitutes telemarketing, then providers and other advertisers generally will be required to obtain a consumer's prior written express consent for such autodialed or prerecorded calls to a Restricted Line. However, if a telemarketing call to a Restricted Line delivers a "health care" message by or on behalf of a HIPAA-covered entity or its business associate, the new HIPAA exception will apply and the recipient's written consent will not be required. Prior verbal consent, however, will be required. Calls made by or on behalf of a tax-exempt, nonprofit organization likewise generally will require only prior express consent rather than prior written consent. The distinction between telemarketing and nontelemarketing calls can be difficult to discern in some cases. Providers will need to examine their messages carefully and ensure that they know what types of communications they are making in order to obtain the correct consent for calls to a Restricted Line.

The FCC's rules likewise require a recipient's prior written consent for prerecorded calls made to residential phone lines. However, no prior consent is required if the call (1) is made for emergency purposes; (2) is not made for a commercial purpose; (3) is made for a commercial purpose but does not include or introduce an advertisement or constitute telemarketing; (4) is made by or on behalf of a tax-exempt nonprofit organization; or (5) delivers a ''health care'' message made by, or on behalf of, a "covered entity" or its ''business associate."

However, providers should be aware that in instances where a prerecorded healthcare-related call's primary motivation appears to be sending a telephone solicitation or unsolicited advertisement rather than a true healthcare-related message, or in those cases where the call is not covered by HIPAA, as determined by the U.S. Department of Health and Human Services, the restrictions generally applicable under the TCPA will apply "as the facts warrant," according to the FCC's commentary.

The FCC's newly adopted HIPAA exception also exempts prerecorded healthcare-related calls made by, or on behalf of, a ''covered entity'' or its ''business associate," from the FCC's other requirements, such as identification, time-of-day, opt-out and abandoned call requirements. This rule change largely harmonizes the FCC's position with that of the Federal Trade Commission's (FTC) telemarketing sales rule (TSR).

The FCC also implemented a rule that requires telemarketers to implement an automated, interactive opt-out mechanism for autodialed or prerecorded telemarketing calls to wireless numbers and for prerecorded telemarketing calls to residential lines, which would allow a consumer to opt out of receiving additional calls immediately during a telemarketing robocall. This rule change also largely harmonizes the FCC's position with that of the FTC's TSR.

When required, a consumer's written consent must be signed or electronically signed and be sufficient to show that the consumer (1) received ''clear and conspicuous disclosure'' of the consequences of consenting (i.e., that the consumer will receive future calls that deliver prerecorded messages by or on behalf of the recipient of the consent); and (2) having received this information, agrees unambiguously to receive such calls at a telephone number the consumer designated. In addition, the written agreement must be obtained ''without requiring, directly or indirectly, that the agreement be executed as a condition of purchasing any good or service.'' Although prior express consent can be obtained either orally or in writing, the FCC provides little guidance as to how to ensure such consent is documented, leaving it to the caller to determine whether to rely on a verbal consent in complying with its requirements under the rules.

The TCPA has seen an explosive growth in class action litigation over the past few years. This growth has been largely driven by plaintiffs eager to receive the statutory damages of between $500 and $1,500 per violation, without need to prove actual damages. There is no class action cap on the statutory damages under the TCPA. Hence, providers should carefully examine their telemessaging practices.