New FTC Exemption a Boon to Suppliers

BUSINESS NEWS

In draft regulations that were issued for public review and comment last year, the Federal Trade Commission (FTC) con­sidered whether to im­pose a complete ban on computer-generated telephone calls. Fortunately for the healthcare industry, several technology companies that support healthcare service and equipment providers rallied to inject an industry perspective before the final regulations were issued.

At the end of August, FTC announced amendments to its telemarketing sales rule. The new amendments prohibit all prerecorded telemarketing sales calls, but create a limited exemption specifically for calls subject to the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Without the ex­emption, such a prohibition would have hindered the efforts of medical device manufacturers, pharmaceutical com­panies, and health-related pro­viders to recall products, issue reminders or warnings about medicines, or even to check on the health and welfare of customers in areas affected by natural disasters.

According to the Aug­­ust amendments, calls de­livering a prerecorded message made by, or on behalf of, a "covered entity or its business associate" are exempt from the new telemarketing sales rule. —Daniel B. Winslow, partner; and James Kossuth, associate; Duane Morris LLP (Boston).

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