Electronic Consent By A Medicare Beneficiary To Be Called By A DME Supplier

(July 2013)

In prior Medtrade Monday articles, I have written about the fact that the CMS contractors (e.g., NSC, ZPICs) are focusing on whether DME suppliers are calling Medicare beneficiaries in violation of the telephone solicitation statute and Supplier Standard # 11. If the NSC concludes that such a violation is occurring, then it may revoke the DME supplier’s Part B number. If a ZPIC concludes that such a violation is occurring, then it may instruct the DME MACs to suspend payments to the DME supplier. Under both the telephone solicitation statute and Supplier Standard # 11, a DME supplier cannot call a beneficiary (who has no prior relationship with the supplier) unless the beneficiary has given his written permission to be called by that supplier. Similar requirements can be found in FTC, FCC, and HIPAA rules.

What Are The Requirements?

A key issue under the telephone solicitation statute, the FTC/FCC rules, and the HIPAA marketing authorization is whether an electronic signature via a website or a recorded call will suffice for the consent requirement. By preempting most statutes and regulations that have writing requirements which may deny the effect of electronic formats, the Electronic Signatures in Global and National Commerce Act (the “E-SIGN Act”) promotes the use of electronic contracts, signatures, and recordkeeping in private business transactions.[ 15 U.S.C. § 7001(a) (2012) (“Notwithstanding any statute, regulation, or other rule of law (other than this subchapter and subchapter II of this chapter), with respect to any transaction in or affecting interstate or foreign commerce—(1) a signature, contract, or other record relating to such transaction may not be denied legal effect, validity, or enforceability solely because it is in electronic form; and (2) a contract relating to such transaction may not be denied legal effect, validity, or enforceability solely because an electronic signature or electronic record was used in its formation.”).] While CMS has not issued clear guidance on the issue, both the FTC and the FCC have indicated that electronic signatures that comport with the E-SIGN Act will satisfy the consent requirements for the FTC/FCC rules.[ See FCC, “In re Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991,” CG Doc. No. 02-278 (FCC 12-21) ( Feb. 15, 2012) (“In the 2010 TCPA NPRM, the Commission proposed to allow sellers or telemarketers to obtain prior express written consent using any medium or format permitted by the E-SIGN Act, as the FTC permits in the TSR.98 The FTC specifically found that consent obtained via an email, website form, text message, telephone keypress, or voice recording are in compliance with the E-SIGN Act and would satisfy the written consent requirement in the amended TSR.99 Consistent with the FTC, we now similarly conclude that consent obtained in compliance with the E-SIGN Act will satisfy the requirements of our revised rule, including permission obtained via an email, website form, text message, telephone keypress, or voice recording.”).]

Under the E-SIGN Act, an electronic contract or record to which the electronic signature is attached must be “created, generated, sent, communicated, received, or stored by electronic means.”[ 15 U.S.C. § 7006(4).] Further, the electronic record must “accurately reflect[ ] the information set forth in the contract . . . and . . . remain[ ] accessible to all persons who are entitled to access . . . in a form that is capable of being accurately reproduced by later reference.”[ 15 U.S.C. § 7001(d)(1).] A person may electronically sign an electronic record through any “electronic sound, symbol, or process attached to or logically associated with a contract or other record and executed and or adopted by a person with the intent to sign the record.”[ 15 U.S.C. § 7006(5).] The Uniform Electronic Transactions Act (“UETA”), adopted by most states, includes a similar definition of “electronic signature.”[ UETA § 2(8) (1999) available at https://www.law.upenn.edu/library/archives/ulc/uecicta/eta1299.pdf. Virginia enacted UETA in 2000. See Va. Code. § 59.1-479 et seq.; see also http://www.ncsl.org/issues-research/telecom/uniform-electronic-transactions-acts.aspx. ]

What Counts As A Signature?

Neither the E-SIGN Act nor UETA specify the technology or technique required to electronically sign a document. Rather, the acts provide broad definitions that encompass a variety of methods and forms. Thus, “[w]hether any particular record is ‘signed’ is a question of fact” that depends on the totality of the surrounding circumstances.[ UETA § 2, cmt. 7.] In the comments to UETA, the drafters emphasize that the surrounding facts must evidence (1) the signer adopted the sign or symbol with the intent to sign, and (2) the resulting signature is linked to the document or record. Examples of electronic signatures in the comments include “one’s name as part of an electronic mail communication”; “the standard webpage click through process” in which the signer enters information and clicks “I Agree”; and a “digital signature using public encryption keys.”[ UETA § 2, cmt. 7.]

Electronic signatures should satisfy the written consent requirements of the various telephone solicitation rules. Note that the DME supplier may have to argue this position during the appeals process under Medicare. Medicare contractors may argue that electronic signatures are not sufficient and, as a result, attempt to deny or demand a refund for all claims resulting from the telephone contacts.

This monograph is not intended to be legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general information purposes only. The law pertaining to this monograph may have changed following the date of the monograph. The reader should consult his or her own attorney for legal advice concerning the contents of this monograph. Except where noted, attorneys are not certified by the Texas Board of Legal Specialization.

Prepared by:

Health Care Group
Brown & Fortunato
P.O. Box 9418
Amarillo, Texas 79105-9418
(806) 345-6300
(806) 345-6363 (fax)
www.bf-law.com

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15 U.S.C. § 7001(a) (2012) (“Notwithstanding any statute, regulation, or other rule of law (other than this subchapter and subchapter II of this chapter), with respect to any transaction in or affecting interstate or foreign commerce—(1) a signature, contract, or other record relating to such transaction may not be denied legal effect, validity, or enforceability solely because it is in electronic form; and (2) a contract relating to such transaction may not be denied legal effect, validity, or enforceability solely because an electronic signature or electronic record was used in its formation.”).

See FCC, “In re Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991,” CG Doc. No. 02-278 (FCC 12-21) ( Feb. 15, 2012) (“In the 2010 TCPA NPRM, the Commission proposed to allow sellers or telemarketers to obtain prior express written consent using any medium or format permitted by the E-SIGN Act, as the FTC permits in the TSR.98 The FTC specifically found that consent obtained via an email, website form, text message, telephone keypress, or voice recording are in compliance with the E-SIGN Act and would satisfy the written consent requirement in the amended TSR.99 Consistent with the FTC, we now similarly conclude that consent obtained in compliance with the E-SIGN Act will satisfy the requirements of our revised rule, including permission obtained via an email, website form, text message, telephone keypress, or voice recording.”).

15 U.S.C. § 7006(4).
15 U.S.C. § 7001(d)(1).
15 U.S.C. § 7006(5).
UETA § 2(8) (1999) available at https://www.law.upenn.edu/library/archives/ulc/uecicta/eta1299.pdf. Virginia enacted UETA in 2000. See Va. Code. § 59.1-479 et seq.; see also http://www.ncsl.org/issues-research/telecom/uniform-electronic-transactions-acts.aspx.
UETA § 2, cmt. 7.
UETA § 2, cmt. 7.