July 1, 2021
By Ian M. Ross and Jorge A. Perez Santiago
(Originally featured by the American Health Law Association in the Journal of Health and Life Sciences Law, July 2021, at 29. © American Health Law Association, americanhealthlaw.org. All rights reserved.)
Abstract: Thousands of companies are sued every year under the Telephone Consumer Protection Act of 1991 (the TCPA). The attorneys who bring these lawsuits target every industry, but in recent years have focused much of their attention on health care companies and medical providers who communicate with their patients via text message and prerecorded messages. Many courts have held that certain provisions in the TCPA and its implementing regulations are subject to interpretation, and plaintiffs' attorneys have taken advantage of this uncertainty by filing lawsuits first and worrying about the implications later. Although appellate courts—and even the United States Supreme Court—have stepped in to clarify the scope of the TCPA, it is important for health care professionals to understand the dangers posed by these lawsuits and to make sure that their compliance program and communications with their patients follow the TCPA and applicable regulations. This article outlines the basic structure of the TCPA and explains (1) what it prohibits, (2) the exemptions to the TCPA that have been enacted to protect health care professionals who need to communicate with their patients, and (3) how those exemptions have been interpreted by courts and why those interpretations continue to evolve.
Health care companies, medical professionals, and pharmacies have increasingly relied on technology-assisted communication to communicate with patients and consumers regarding their health care services, including availability of vaccinations and prescriptions, appointment reminders, follow-ups, and debt collection. The importance of the communications has only increased during the COVID-19 pandemic, as demands for remote services and telehealth have increased. These communications may expose health care professionals to costly litigation and class action liability under the Telephone Consumer Protection Act of 1991. Plaintiffs' attorneys file TCPA lawsuits by the thousands, taking advantage of well-meaning communications that may trigger technical consent requirements or fall outside the express TCPA exemptions for health care messages.
The statutory damages available under the TCPA can be staggering. Damages can amount to the actual monetary loss or $500 for each call made in violation of the TCPA and, if the violation is found to be willful or knowing, then courts may treble the damages to $1,500 per violation. When lawsuits are brought as putative class actions, plaintiffs may seek to recover damages for thousands of calls made by the same company (or companies) in a single lawsuit. Some TCPA lawsuits have resulted in jury verdicts or settlements for tens of millions of dollars.
Given the substantial dangers of liability posed by the TCPA, it is increasingly important for health care professionals to understand its pitfalls and the constantly evolving interpretation of its prohibitions. This article is no substitute for individually tailored compliance procedures and protocols for health care professionals who communicate with their patients through proprietary and cloud-based services. Nonetheless, the hope is to provide a basic background on the TCPA, (1) outlining its prohibitions and the regulations enacted by the Federal Communication Commission (FCC), (2) explaining the health care-related exemptions that have been enacted under the TCPA, and (3) providing some basic guidance on how those exemptions have been interpreted by courts.
The TCPA regulates the types of calls, prerecorded messages, unsolicited faxes, and text messages that are made to residential and cell phone numbers. This article focuses on two of the prohibitions under the TCPA that have led to many of the lawsuits brought against health care companies and providers.
First, the TCPA makes it unlawful "to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using an automatic telephone dialing system or an artificial or prerecorded voice . . . to any telephone number assigned to a . . . cellular telephone service." With respect to the concept of "prior express consent," it is important to know that some form of express consent is required to use any type of automatic telephone dialing system (ATDS) or an artificial or prerecorded voice (APRV) when making a call for a non-emergency purpose, even if that call is merely informational. For a telemarketing call or advertisement, that form of consent must satisfy specific regulatory requirements and must be in writing (called "prior express written consent").
Second, it is unlawful to make calls to a residential line using an APRV unless the called party has given prior express written consent to be called using an APRV. These calls to residential lines may be made without prior express written consent if the call (i) is for emergency purposes, (ii) is not made for a commercial purpose, (iii) is made for a commercial purpose but does not include or introduce an advertisement or constitute "telemarketing," (iv) is made by or on behalf of a tax-exempt nonprofit organization, or (v) delivers a "health care" message for a covered entity or business associate as defined by the HIPAA Privacy Rule.
The regulations enacted under the TCPA contain other limitations on telephone solicitations not relevant here; for example, telephone solicitations before 8 a.m. or after 9 p.m., and solicitations made to telephone subscribers registered on the national do-not-call registry, are both prohibited under these regulations. For most health care professionals, an analysis of whether one's communications with a client may be subject to the TCPA will turn on whether (1) the calls are made to a cellular telephone or a residential line using an ATDS (or APRV), (2) the content of the call constitutes "telemarketing," and (3) the call recipient has provided the requisite express consent to receive the call.
The key exemptions that may protect health care-related messages under the TCPA are the FCC Healthcare Exemption and the Emergency Purposes Exemption.
The FCC has adopted a "Healthcare Exception" or "Healthcare Exemption" that exempts calls and text messages that would be protected under the Health Insurance Portability and Accountability Act (HIPAA) guidelines from the TCPA's prohibitions against unsolicited calls and messages. In defining "health care" for purposes of this exception, the FCC regulations look to HIPAA, which broadly defines "health care" to include "care, services, or supplies related to the health of an individual."
The FCC has held that communications about medical services such as "immunization reminders, health screening reminders, medical supply renewal requests, and generic drug migration recommendations" are not marketing "inducements to purchase goods or services" and thus are not subject to the TCPA. Such calls, even if perceived to be encouraging medical services, "do not tread heavily upon the consumer privacy interests because these calls are placed by the consumer's health care provider to the consumer and concern the consumers' health."
The district court in Jackson v. Safeway, Inc. specifically rejected the argument that a health care message, simply because it could be read as advertising or marketing the services of a company, fell outside the TCPA's health care exemption. In that case, a pharmacy placed a prerecorded call to plaintiff's cellphone reminding her to get a flu shot. The court granted summary judgment for the defendant, finding that it was clear that the "flu shot calls are 'health care' messages because they relate to the 'care, services, or supplies related to the health of an individual.'"
Importantly, the December 30, 2020 FCC Order implementing section 8 of the Telephone Robocall Abuse Criminal Enforcement and Deterrence (TRACED) Act limited the call volumes permitted under this and other commonly-used exemptions to residential lines. Specifically, HIPAA-related calls to a residence are limited to one APRV call per day up to a maximum of three per week, and callers must now allow recipients to opt out of such calls using automated opt-out mechanisms.
The TCPA expressly exempts calls "made for emergency purposes." The legislative history of the TCPA shows that Congress intended "emergency purposes" to be interpreted "broadly rather than narrowly." Congress delegated authority to the FCC to define "emergency purposes."
Consistent with that Congressional mandate, the FCC's broad definition of "emergency purposes" includes "health" and "safety" messages and is not limited to sudden catastrophic events. The FCC restricted this exemption to "calls for which there is exigency and that have a healthcare treatment purpose, specifically: appointment and exam confirmations and reminders, wellness checkups, hospital pre-registration instructions, pre-operative instructions, lab results, post-discharge follow-up intended to prevent readmission, prescription notifications, and home healthcare instructions."
Consistent with Congressional intent, courts have applied this exemption broadly. For example, in Roberts v. Medco Health Sols., Inc., the court granted summary judgment to two pharmacy benefit managers, finding that their prerecorded calls advising a prescription was ready to be picked up were permissible emergency purpose calls that fell outside the TCPA.
On March 20, 2020, the FCC published a Declaratory Ruling that confirms the COVID-19 pandemic is an "emergency" that qualifies for this emergency purposes exemption. The COVID-19 exception applies only to calls and texts that are (1) made by a hospital or health care provider, and (2) solely informational, necessary because of the COVID-19 outbreak, and directly related to threat or safety arising out of the COVID-19 outbreak. Debt collection calls and calls advertising unrelated commercial services are specifically excluded from this exception.
The Western District of Washington recently applied the COVID-19 exception in a case involving a text message from Walmart Pharmacy directing customers to curbside pickup and mail-order options during the pandemic. The court found that the message's "sole purpose was to inform [Walmart's] customer about the coronavirus and available mitigation efforts . . . espoused by federal and state health authorities," and that the inclusion of a link to the Walmart Pharmacy website, without more, "does not render a message advertising or telemarketing."
Understanding the type of equipment being used, the purpose of the call, and whether there was consent to receiving the call are all important factors that must be taken into consideration when determining TCPA compliance.
Many of the lawsuits brought against health care professionals under the TCPA may turn on whether an APRV or ATDS was used in connection with the call. ATDS is defined as "equipment which has the capacity—(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers." The question of "capacity" has generated substantial litigation over the years, and the United States Supreme Court weighed in earlier in 2021 to resolve a split of opinion among the federal appellate courts, holding that to qualify as an ATDS under the TCPA, a device must have the capacity either to store a telephone number using a random or sequential number generator, or to produce a telephone number using a random or sequential number generator.
Many believed the Supreme Court's narrow interpretation of ATDS was poised to significantly weaken the scope of the TCPA because most of the commercial and cloud-based services used to call and message consumers do not allow number generation, and thus are not subject to the TCPA. However, plaintiffs have continued litigating whether certain commercial and cloud-based messaging services constitute an ATDS with mixed success.
The TCPA requires different forms of consent depending on whether the call at issue is made for a telemarketing or advertising purpose. "Advertisement" means "any material advertising the commercial availability or quality of any property, goods, or services." "Telemarketing" means the "initiation of a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services." For a message to constitute telemarketing or advertising under the TCPA, it must contain a "clear, unequivocal implication of advertising."
Courts around the country have routinely dismissed TCPA claims where the disputed message was not intended to encourage a future commercial transaction and was instead an informational or non-transactional message—for example, messages offering job training opportunities, informational notifications sent to existing customers about policy renewals, and messages informing individuals of research studies or health-related courses.
For non-telemarketing calls to wireless telephone numbers, the TCPA and its supporting regulations provide that prior "express consent" generally exists where (i) the customer knowingly provided his/her mobile number to the caller, and (ii) the non-telemarketing call relates directly to the same account, service, or transaction for which the customer knowingly gave the number.
FCC regulations define "prior express written consent" and provide specific standards for the "agreement" required to qualify for consent to receive telemarketing calls on wireless or residential telephone lines. These regulations require the called party to consent through an agreement that: (i) states that the consent is from the person called to receive telemarketing calls using an ATDS or APRV for a specific number from a specific marketer; (ii) acknowledges that the consent is not required as a condition of purchasing any goods/services; and (iii) provides for a signature by the person called. The disclosures must be clear and conspicuous—"apparent to the reasonable consumer, separate and distinguishable from the advertising copy or other disclosures." Proving prior express written consent is thus often a more difficult exercise than proving prior express consent, particularly when it is obtained through a website.
In considering whether consent can be obtained through an online form, some courts in recent years have been hostile to website disclosures that are not "reasonably communicated" to consumers because they appear in small print, are available only through a hyperlink to another location or webpage, or are not in close proximity to wherever customers are entering their mobile phone numbers. Plaintiffs' attorneys bringing claims under the TCPA will likely argue that such website disclosures do not demonstrate actual consent to receive telemarketing messages through an ATDS or APRV. Ultimately, companies must be mindful that consumers may revoke their consent at any time.
Even after years of litigation and thousands of cases, there is substantial uncertainty in how the TCPA is interpreted and when it applies to calls, text messages, and facsimiles. Health care professionals and companies that use software, cloud-based equipment, or automated messaging services to contact their patients need to maintain and update their compliance programs and consult with counsel as needed to understand the developing law in this area. Considerations should include: (1) the recipients who will receive the messages and how their contact information was obtained, (2) the purpose and content of the message and whether that content may trigger the TCPA's telemarketing prohibitions, (3) the consent provided by the call recipients and the form in which that consent was provided, and (4) whether an exemption to the TCPA may exist if the message is health care-related or made for emergency purposes. As health care professionals look for new and innovative ways to interact with their customers, they need to take care that their communication efforts, critical and important as they may be, do not run afoul of the TCPA.
Jorge A. Perez Santiago is a commercial litigator at Stumphauzer Foslid Sloman Ross & Kolaya, PLLC. He advises and defends national manufacturers, retailers, telecommunications, and health care companies in consumer class actions, commercial disputes, and government investigations. As the son of a physician, Jorge has a special interest in advising and representing health care companies and professionals.
