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Medical Company Sued Following Change to Medical Debt Collection Rules

Last summer the rules that govern the collection of medical debt became tighter when the FCC gave voice to a ruling that made it more difficult to reach out to patients on their mobile devices without first providing express consent for such a call.  

A hospital chain based in California has become one of the first healthcare providers in the country to be sued based upon that ruling made last July.  The focal point of the class-action lawsuit is Prospect Medical Group’s Southern California Hospital at Culver City.  The allegations set forth in the suit claim that an automated dialer was used by the hospital to contact the cell phone of a patient named Donna Ratliff to collect on a debt without having prior consent to call her mobile device.

The medical debt collection industry originally asked the FCC to give greater clarification on the Telephone Consumer Protection Act in the hopes that greater flexibility would be extended.  The medical debt collection industry was also hoping that the FCC could address more recently related issues such as consent to call, reaching wrong numbers and auto-dialing mobile devices.  But instead, the FCC pointedly asserted that collectors of medical debt must have prior consent before contacting a cellular phone, leaving few options for phone numbers that have been reassigned.

Prospect Medical issued a statement that makes it clear that they follow necessary protocols to obtain the proper consent to make contact with patients on mobile devices.  The statement said  “All of our patients are asked to sign an irrevocable authorization permitting our hospitals to contact them via telephone—including, specifically, via cellphone—in their efforts to collect outstanding debt."  

Hospitals have previously enjoyed a measure of room to move when calling patients for the purpose of medical debt collection as a part of the medical encounter.  However, medical providers must ensure diligence about ensuring that the debt can be linked back to the medical encounter when the patient first provided the cell number to the provider.

“At this point, best practice for providers is to secure written consent during the initial intake process that very clearly states and obviously makes note of the fact that auto-dialers could be used and that mobile devices will be contacted if that is the number that the patient has provided to the facility” said Mnet Financial CEO David Hamilton.

Violations of TCPA are already quite active with lawsuits related to the TCPA increasing between 2010 and 2014 more than 560% based on data provided by the Association of Credit and Collection Professionals (ACA).  “With the FCC’s latest clarification, we are seeing an increase of these kinds of lawsuits and it isn’t likely to change in the near future” said Hamilton.  The penalties for such infractions can range from as little as $500 per phone call, up to as much as $1,500 for a willful violation.

The California case does deal with the matter of express consent but does not, however, broach the issue of what happens when a medical debt collector reaches out to someone erroneously.  The FCC does allow collectors of medical debt to call a wrong number once without threat of penalty, whether or not someone answers the call.  However, studies show that more than 100,000 mobile phone numbers are changed each and every day.  This situation has led to ACA International suing the FCC in challenge to the order issued last July.  

“It’s increasingly difficult for medical debt collectors to keep up with the risk involved” said Hamilton.  “It’s nearly impossible to confirm that the person you are reaching out to is going to actually be the person you are trying to reach.  It’s a very difficult situation.

Mr. Hamilton says that the best possible way for a provider to protect themselves is to create a very thorough process for obtaining consent from the patient and simply respecting the wishes of those who choose to opt out.

Last modified onTuesday, 16 February 2016 18:59
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