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Regulatory and Legal Update for Healthcare Collections

April 11, 2019

Porter Heath MorganVice President & General Counsel

Morgan Financial Group

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Porter Heath Morgan, is a third generation collection attorney and has worked in the commercial, medical, and retail AR industry for over 20 years. Heath is licensed in Colorado, Kansas, Oklahoma, and Wyoming and is a member of the Supreme Court Bar. He is a member of ACA International’s Member Attorney Program, and a founding member of the Colorado Creditor Rights Bar Association, where he serves as a member of the Board of Directors.

He is passionate about education through many mediums and has presented seminars and webinars on many aspects of the ARM industry for ACA International, Boulder County Bar Association, Colorado Creditor Bar Association, International Association of Commercial Collectors (IACC), Medical, Dental, and Hospital Business Association (MDHBA), Rocky Mountain American Association of Healthcare Administrative Management (AAHAM), and Wyoming, Colorado and Oklahoma Chapters of HFMA.

Porter Heath Morgan – Vice President & General Counsel

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• Regulatory Developments• Price Transparency

• CMS Rule on Price Transparency

• Balance Billing Laws

• CFPB Developments - New Director, New Direction• State Regulatory Rules Increase the Focus on Data Privacy

• Case Law Updates & Developments • 501c(3) Lawsuits

• Recent Developments on Patient Contacts• Patient Innovation• Regulatory Developments• Case Law Updates

Agenda & Overview

CMS (Center for Medicare & Medicaid) Rule on Price Transparency

CMS-1694-F Effective January 1, 2019

Hospitals must post standard charges online in spreadsheets

CMS no means to enforce rule, no penalties

13% of patients seek out cost information before receiving care

3% of patients compared prices of different providers

2017 Health Affairs Study

Price Transparency

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New Efforts to Pass Nationwide Anti Balance Billing Laws

End Surprise Billing Act of 2019 (HR 861)

No More Surprise Medical Bills Act of 2018 (S.3592)

SB1264 New Balance Billing Legislation Introduced

Balance Billing

New CFPB Director, New CFPB Direction

Kathy Kraninger confirmed director December 6, 2018

Regulation by Enforcement is Over

Proposed Debt Collection Rules Not Introduced March 2019

CFPB still receiving and following up on complaints and information from OIG and OSHA

Regulatory Developments

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New Director, New Direction

• “I’ve never had any qualms about telling our people, if we have a case involving things people really shouldn’t have been doing, bring the case, right the wrong, and if a judge tells us we can’t, fine,” Cordray said. “There are a lot of bad things that need to be addressed, and we shouldn’t shy away just so we could have a perfect won-loss record.”

• “If you lose every now and then and you get called overreaching, that probably means you’re getting right up to the proper limits of your authority.”

• “We wanted to send a message: There’s a new cop on the beat… Pushing the envelope is a loaded phrase, but that’s absolutely what we did.”

Richard Cordray – December 3rd 2017

CFPB Developments

New Director, New Direction

• I think it is fair to say that the previous governing philosophy here was to aggressively “push the envelope” in pursuit of the “mission;” that we were the “good guys” and the “new sheriff in town,” out to fight the “bad guys.” Simply put: that is what is going to be different. In fact, that entire governing philosophy of pushing the envelope frightens me a little. I would hope it would bother you as well.

• It is not appropriate for any government entity to “push the envelope” when it comes into conflict with our citizens. The damage that we can do to people could linger for years and cost them their jobs, their savings, and their homes. If the CFPB loses a court case because we “pushed too hard,” we simply move on to the next matter. But where do those that we have charged go to get their time, their money, or their good names back? If a company closes its doors under the weight of a multi-year Civil Investigative Demand, you and I will still have jobs at CFPB. But what about the workers who are laid off as a result? Where do they go the next morning?

Mick Mulvaney – January 23, 2018

CFPB Developments

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New Director, New Direction

• We will be reviewing everything that we do, from investigations to lawsuits and everything in between. When it comes to enforcement, we will be focusing on quantifiable and unavoidable harm to the consumer. If we find that it exists, you can count on us to vigorously pursue the appropriate remedies. If it doesn’t, we won’t go looking for excuses to bring lawsuits.

• On regulation, it seems that the people we regulate should have the right to know what the rules are before being charged with breaking them. This means more formal rulemaking on which financial institutions can rely, and less regulation by enforcement.es to bring lawsuits.

• And we will be prioritizing. In 2016, almost a third of the complaints into this office related to debt collection. Only 0.9% related to prepaid cards and 2% to payday lending. Data like that should, and will, guide our actions

• Mick Mulvaney – January 23, 2018

CFPB Developments

States Adopting New Data Privacy Rules

• Colorado past new Data Privacy Rules – June 2018

• General Data Protection Regulation (GDPR) - Europe Data Privacy Standards adopted May 2018

California Consumer Privacy Act – Passed June 2018, Requirements don’t go in to effective January 1, 2010

Regulatory Developments

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State Law Overview – Data Privacy

Expanded Definition of Personal Information:Alabama, Alaska, California, Connecticut, Delaware, Florida, Georgia, Illinois, Iowa,

Kansas, Maine, Maryland, Massachusetts, Missouri, Montana, Nebraska, Nevada, New

Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio,

Oregon, Rhode Island, South Carolina, South Dakota, Texas, Vermont, Virginia,

Wisconsin, Wyoming, District of Columbia, and Puerto Rico.

Content requirements for notificationsAlabama, California, Florida, Hawaii, Illinois, Iowa, Maryland, Massachusetts, Michigan,

Missouri, Montana, New Hampshire, New Mexico, New York, North Carolina, Oregon,

Rhode Island, South Carolina, Vermont, Virginia, Washington, West Virginia, Wyoming,

and Puerto Rico.

State Law Overview – Data Privacy

Notification to State Agency Required:Alabama, Alaska, California, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana,

Iowa, Louisiana, Maine, Maryland, Massachusetts, Missouri, Montana, Nebraska, New

Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio,

Oregon, Rhode Island, South Carolina, South Dakota, Texas, Vermont, Virginia, Washington,

Wisconsin, and Puerto Rico.

Credit Monitoring Required:California, Connecticut, and Delaware.

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Case Law Updates 501c(3) Lawsuit

• Klein v. Affiliated Group

• Filed in District of Minnesota

• Alleges third party agency collection letter was required by law to

include a conspicuous written notice that notifies and informs

recipients about the availability of financial assistance under the

hospital facility’s FAP and includes the telephone number of the

hospital factility office or department that can provide information

about the FAP and FAP application process and the direct Web site

address where copies of the FAP, FAP application form, and plain

language summary of the FAP may be obtained.

• See. 26 C.F.R. 1.501(r)-4(b)(5)(i)(D)(2).”

Regulatory Developments in Patient Contacts

Today the 2 Primary Ways Patients are Contacted for Billing and Collection Matters are Letters and Telephone Calls. In the next 10 years, this will change to Emails and Text Messages.

Let’s Look At:

• Patient Innovation

• Regulatory Developments

• Case Law Updates

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Patient Innovation

• Characteristic of Today’s Patient”:• Cellphone Only Household

• View Cellphone as Personal Right

• Don’t Answer Calls, Don’t Listen to Voicemails

• Text Response to Missed Calls

• Don’t Wait Around for Rules and Regulations to be Determined by Courts

• AirBnB/Uber Culture Rewards Innovation & Apps that Block Calls

• Regulators, Telephone Carriers, and Businesses Struggling to Keep Up

Emerging Technology – Patient Innovation

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Call Watch

Call Watch

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Call Watch

Block Calls Get Cash

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Block Calls Get Cash

Metro Block-It

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• Federal Regulatory Interest in Robo Calls and Call Blocking Technology has increased over the past year

• FTC Now Share Robocall Complaint Information with Call Blocking Technology Companies

• FCC Proposed Rules February 2019

• TRACED Act S.151 Proposed Legislation in Senate with Bipartisan Support to address Robocalls

Regulatory Updates

• Phone Carriers Now Offering Blocking Services

• Metro PCS

• Verizon – My Fios App

• AT&T – Call Protect App

• T-Mobile – Scam ID App & Scam Block

• Sprint – Premium Caller ID

• Nomorobo.com – all carriers

Carrier Innovation

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• Consent ≠ Right Party Contact

• There Are First and Third Party Implications – Work with Your Vendors to Register Number as Not Spam

• Customer Service Makes A Different

• If Patient Says Do Not Call, Do Not Call

• Register Provider Numbers as Not Spam

• Innovation – Look For Other Ways To Contact Consumer• Email• Text Message• Venmo/Paypal

What Does This All Mean – The Future of Patient Phone Calls

Case Law Updates

• TCPA• Marks v. Crunch - 9th Circuit held point and click dialers are subject to TCPA

• Ringless Voicemail• Saunders v. O’Neal 2018 – MI Dist. Ct. holds Ringless voicemail subject to TCPA

• Schaevitz v. Braman Hyundai March 25 2019 – FL Dist. Ct. holds Ringless

Voicemail subject to TCPA

• Email• Lavallee v. Med-1 Solutions 2017 – IN District Court held Emailing notice

subject to FDCPA

• TrueAccord Litigation – Leyva v. TrueAccord Filed 1/8/2019

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• Porter Heath Morgan• Heath.Morgan@morganfinancialgrp.com

• 303.882.9329

Questions and Discussion