By George Buck and Judd Peak, Frost-Arnett Company

For the uninitiated, the Telephone Consumer Protection Act (TCPA) can pose a minefield of compliance challenges. Yet, understanding this area of law is critical to being able to communicate effectively with patients.


What Does The TCPA Do?

At its core, the TCPA is a simplistic statute. The law prohibits using an automated telephone dialing system (ATDS) or an artificial or pre-recorded voice to dial a consumer’s mobile telephone.[1] That’s it. Victims of violations have a private right of action to sue and recover up to $500 “per violation.”

However, the devil is often in the details, which makes this a heavily litigated area. One thing most practitioners can agree on is that there is no single, universal definition of “automated telephone dialing system.” The precise type of telephony equipment that may run afoul of the TCPA is subject to much debate. Further complicating the problem, the TCPA also applies to text messages and facsimile transmissions – not just telephone calls.


What Makes The TCPA So Risky?

As mentioned earlier, violations can open a caller to liability of $500 per call. Call centers, such as collection agencies, make thousands upon thousands of calls each month. Moreover, the TCPA allows for class action status for potential plaintiffs – meaning the realm of potential exposure is exponentially multiplied. Compounding this problem is that consumer claims often assert that violations are “willful,” meaning that the damages can be tripled. Quick math can show how TCPA litigation often becomes a “bet the business” issue:

(5 calls) x (10,000 consumers) x 3 (for ‘willful’ violation) =

$75,000,000.00 in potential damages

Consumer attorneys have eagerly latched on over the past decade. Lawsuits filed asserting a TCPA claim have more than doubled since 2014. Of those, 88 percent assert class action status. Moreover, the trend in TCPA litigation is to sue not only the third-party vendor making the illegal calls, but also the original entity (e.g., medical provider) who hired that outside vendor. Joint liability is very much alive when considering TCPA claims, and entities can be held liable even if they did not know, send or authorize the communications. Per the FCC, calls “placed by a third-party collector on behalf of that creditor are treated as if the creditor itself placed the call.”[2]


The Future of TCPA Litigation Is Unknown

Although (perhaps because of) the text of the TCPA is simplistic, court interpretation has been all over the spectrum. Recently, a federal court in New Jersey made a blanket ruling that “predictive dialers” do not meet the definition of an ATDS.[3] Right before that, the Ninth Circuit Court of Appeals ruled that all dialing equipment that has the capacity to store or produce, and then dial, a list of random or sequential telephone numbers is an ATDS.[4] The Federal Communications Commission (FCC) attempted to create a unified definition of ATDS in 2015, but that opinion was challenged and thrown out by a different court and no substitute definition took its place.[5]


Best Practices

Since TCPA risk is so high, you might think that calling consumers could go the way of the dodo bird. Not necessarily!

Telephone calls still remain the most effective way to reach consumers, and there are exceptions to the TCPA that should always be considered. First and foremost, TCPA liability does not exist where the called party has given his or her prior express consent to receive calls. Again (repeating the theme), there is some disagreement in courts as to what exactly constitutes “prior express consent.” Nonetheless, it can reasonably be assumed that if a patient provides written authorization to receive automated telephone calls to his or her mobile telephone, then such consent has been granted.

In the healthcare world, prior express consent is best obtained from the patient (or guarantor) at intake, along with check-in, consents to treat, privacy notifications, etc. As part of that process, the patient can simply provide written consent to be contacted at any telephone number he or she provides. The existence of this prior express consent can provide an absolute defense to future TCPA claims.

Other precautions should also be considered. For example, use of a telephony dialing system that does not meet the definition of an ATDS could be relied upon. Such systems often required the element of human intervention to initiate the calls. However, defending these systems in court normally requires expert testimony and can become quite expensive.


Parting Thoughts

Lawsuits filed under the TCPA are exploding, and the potential damages can bankrupt a company. Both providers and their vendors are subject to liability. To maintain effective (and efficient) communications, use of sophisticated telephony equipment is necessary. With these realities in mind, we recommend the following to stay TCPA-compliant:

  • When service is rendered, have the patient/guarantor provide (or confirm) ownership of the mobile telephone number being given.
  • Also at time of service, have the patient/guarantor provide written prior express consent to be dialed at the phone number(s) provided.
  • Only use vendors who can affirmatively demonstrate knowledge of, and compliance with, the TCPA requirements.
  • Ensure that any ATDS being used only has mobile telephone numbers loaded that have corresponding consents.
  • Retain written consents for at least four (4) years.
[1]  The TCPA does not apply to traditional landline telephones. However, fully half of all U.S. households are now mobile-only, and this trend away from landline phones is continuing.
[2]  In re Rules & Regs. Implementing the TCPA, 23 F.C.C. Rcd. 559, 564, ¶ 9 (Jan. 4, 2008).
[3]  Fleming v. Assoc. Credit Servs., Case No. 16-3382, 2018 U.S. Lexis 163120 (D. N.J. Sept. 21, 2018).
[4]  Marks v. Crunch San Diego, LLC, Case No. 14-56834, 2018 WL 4495553 (9th Cir. Sept. 20, 2018).
[5]  ACA Intl., et al v. Federal Communications Comm’n., Case No. 15-1211 (D.C. Cir. Mar. 16, 2018).

Buck George.Frost Arnett.2017Judd Peak
President Emeritus George Buck and Chief Compliance Officer and General Counsel Judd Peak are part of the leadership team at Nashville-headquartered Frost-Arnett Company, which has been helping healthcare clients resolve healthcare account balances for 125 years. Now staffing three offices, Frost-Arnett works with clients nationwide on early-out, bad debt recovery, as well as pre-certification, pre-service, insurance follow-up and cleanup work for legacy systems.  For more information, go online to frost-arnett.com.