A new Federal Communications Commission ruling could challenge medical-debt collectors seeking to contact patients on their cellphones.
The FCC this summer issued an interpretive ruling on the decades-old Telephone Consumer Protection Act after a number of petitioners asked for clarity on issues including autodialing, consent to call and reaching wrong numbers, particularly for cellphones.
The petitioners wanted greater flexibility. But the FCC made it clear that the onus is on debt collectors to confirm express consent before autodialing a cellphone. The challenge, debt collectors say, is that the ruling leaves no leeway when a collection agency doesn't know they have the wrong number for someone.
The industrywide order provides some exceptions for appointment reminders and test results. But the FCC “was very explicit” that the exemptions did not extend to bill collection efforts, said Robert Föehl, general counsel at ACA International, the Association of Credit and Collection Professionals.
Medical-debt collectors say they're working quickly to comply with the changes. Penalties start at $500 and can swell to $1,500 for willful violations.
Hospitals need to be aware of the rule changes because they can be held liable even when it is their vendors who fail to comply with regulations, said George Buck, president of Frost-Arnett, a Nashville-based collections company. “The healthcare world is behind the curve when it comes to getting consent,” he said.
Providers must get express written consent to call patients on their cellphones about billing issues.
Despite record-high levels of insurance coverage, a number of health systems are reporting an increase in bad debt as more patients come in with high-deductible plans. Each year, that adds up to millions of calls from healthcare debt collectors.
Parallon Business Solutions, the revenue-cycle management company owned by HCA, has been trying to reduce the number of autodial calls it makes. “We find it makes no sense to dial someone 50 or 60 times,” said Leslie Newman, Parallon's managing counsel.
Still, she described the calls as “highly effective initially”—within the first 20 to 30 attempts.
Many of those unanswered calls go straight to an automated voicemail message that's little more than a recording of a phone number, without a name attached. And that's precisely the situation where debt collectors can now get into trouble.
The FCC allows debt collectors to mistakenly dial a number one time without penalty—but if that call goes to a generic voicemail message, debt collectors have no way of knowing that they're now on the hook for up to $500 per call going forward. “There's a practical problem,” Föehl said. “There's no way to be 100% compliant.”
ACA International immediately filed a lawsuit challenging the interpretive ruling, arguing that it is at odds with Congress' original intent. The group is hoping for a resolution within a year, but until then, the ruling stands, Föehl said.
The growing scrutiny on medical- debt collection practices extends far beyond the Telephone Consumer Protection Act, or TCPA. State and federal regulators have put the healthcare industry on watch, including the Consumer Financial Protection Board, which held a public hearing in December to address the “unnecessary and frustrating challenges” people face after they incur a medical bill.
A study by the board last year found that medical debt accounts for 52% of collection marks on credit reports. Moreover, consumer credit scores overstate the effect of medical debt, even when overdue bills are paid.
The number of TCPA-related lawsuits increased 560% between 2010 and 2014, according to ACA International, citing numbers from WebRecon, which helps debt collectors identify problematic phone numbers.
Medical debt was the reason for 14% of complaints filed with the Consumer Financial Protection Board last December, WebRecon found. And most complaints came from people pursued for debt they did not owe.
The ruling is likely to become increasingly relevant as cellphones replace landlines. Nearly 60% of households are primarily or exclusively wireless, according to a 2014 survey from the Centers for Disease Control and Prevention.
