Sixth Circuit Court of Appeals Affirms “Prior Express Consent” Defeats TCPA Claim in Healthcare Collections Case

On February 12, 2016 the Court of Appeals for the Sixth Circuit issued an opinion affirming that “prior express consent” will defeat a claim in the Telephone Consumer Protection Act (TCPA). 47 U.S.C. § 227(b)(1)(A)(iii).  The case, Baisden, et al. v. Credit Adjustments, Inc., (U.S. Court of Appeals, Sixth Circuit, No, 15-3411) arose out of an appeal of a District Court Summary Judgment Order. A copy of the opinion can be found here.

The putative class action arose out of Credit Adjustments, Inc.’s (“CA”) attempts to collect a little over one thousand dollars of medical debt incurred by Zachary Baisden and Brenda Sissoko (“plaintiffs”). Plaintiffs contended that CA violated the TCPA when it placed debt collection calls to their cell phone numbers using an “automatic telephone dialing system” and an “artificial or prerecorded voice.” CA neither disputed that it placed calls to their cell phone numbers nor that it used the technologies as alleged. Rather, CA contends that by virtue of plaintiffs’ provision of their cell phone numbers to the hospital where they received medical care, plaintiffs gave their “prior express consent” to receive such calls and, thus, it did not violate the TCPA as interpreted by the Federal Communications Commission (“FCC”)

The underlying facts of the case distinguish this matter from a simple, direct “prior express consent” case. In this case consent was be obtained by and conveyed through an intermediary. (Editor’s Note: The prior express consent methodology described below in this case is prevalent in many healthcare accounts that originate out of a hospital visit.)

Plaintiffs received medical care from Mount Carmel Hospital in Columbus, Ohio. Consultant Anesthesiologists provided anesthesiology services to each at Mount Carmel Hospital, billing Baisden $850.00 in 2011, and Sissoko $273.42 in 2009 and $171.52 in 2011. After plaintiffs did not pay these bills, Consultant Anesthesiologists transferred these delinquent accounts to CA. CA then called plaintiffs’ cell phone numbers, despite never having received their contact information directly from them. Instead, CA received the numbers from Consultant Anesthesiologists, which had received them from Mount Carmel Hospital.

As part of their admission for services to Mount Carmel Hospital, Baisden and Sissoko signed Patient Consent and Authorization forms covering “all medical and surgical care.”

Baisden’s authorization provides, in pertinent part, as follows:

Release of information

I understand Mount Carmel may use my health information for many reasons as needed:

- billing and payment (Emphasis added)

Sissoko signed two different forms. In 2011, she agreed to the same terms set forth for Baisden. The 2009 form, however, is different and provides in pertinent part as follows:

Release of information

I understand Mount Carmel may use my health information for a range of purposes including insurance/payment eligibility verification; billing and collecting moneys due from me, private and public payors or their agents including insurance companies, managed care entities, my employer, state and federal government programs and the Bureau of Workers’ Compensation; obtaining pre-admission or continued length of stay certification; quality of care assessment and improvement activities; evaluating the performance or qualifications of physicians and health care workers; conducting medical and nursing training and education programs; conducting or arranging for medical review and audit services; ensuring compliance with legal, regulatory and accreditation requirements, performance of autopsies, and; public health activities. I authorize Mt. Carmel to receive or release my health information, whether written, verbal, electronic including secured internet web sites or by facsimile to such employees, agents or third parties as are necessary for these purposes and to companies who provide billing services for physicians or other providers involved in my medical care. (Emphasis Added)

The court reviewed the four instances of prior FCC guidance on “prior express consent.”

1)     In the Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 7 FCC Rcd. 8752, 8769 (1992) ,(the “1992 Order”).

2)     In the Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 23 FCC Rcd. 559, 559 (2008),  (the “2008 Ruling”)

3)     2014 GroupMe Declaratory Ruling, Matter of GroupMe, Inc./Skype Commc’ns S.A.R.L Petition for Expedited Declaratory Ruling Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 29 FCC Rcd. 3442, 3444 (2014) (the “GroupMe” ruling).

4)     In the Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 30 FCC Rcd. 7961 (2015) (the “2015 Order”)

After reviewing the prior FCC guidance the court ruled that 1) there is no one specific way to provide express prior consent, 2) the scope of the consent must be determined by the facts in each situation, 3) callers may obtain consent through an intermediary, and, 4) after applying the specific facts of this case to the law, the plaintiffs provided “prior express consent” in this case.

The court determined:

“Consumers may give “prior express consent” under the FCC’s interpretations of the TCPA when they provide a cell phone number to one entity as part of a commercial transaction, which then provides the number to another related entity from which the consumer incurs a debt that is part and parcel of the reason they gave the number in the first place. More specifically, the provision of a cell phone number to a hospital that then provides that cell phone number to an affiliated physicians’ group that provided medical services to a consumer arising out of the same occurrence can constitute “prior express consent” under the TCPA.”

insideARM Perspective

The court’s opinion is a well-reasoned, practical decision. As noted earlier, this type of consent methodology is common for healthcare accounts arising out of a hospital visit.  The fact that the court discussed all prior FCC guidance on the issue, including the controversial 2015 Order, is positive for the ARM industry. It will be interesting to see how other circuits will respond to similar fact situations.