FTC: Online billing service deceptively collected medical records

The agency reaches a settlement with a billing service that tried to populate online medical records with customer data

An online service allowing consumers to pay their medical bills failed to adequately inform them that it would also try to collect highly detailed medical information from their pharmacies, medical labs and insurance companies, the U.S. Federal Trade Commission said.

The FTC has reached a proposed settlement with PaymentsMD, an Atlanta health billing company, and former CEO Michael Hughes requiring the company to destroy any medical information it collected related to its separate online medical records service, Patient Health Report, the agency said Wednesday.

PaymentsMD "deceptively" used the sign-up process for its billing service to seek customers' consent to obtain detailed medical information, the FTC said in a press release.

PaymentsMD didn't immediately return a message seeking comment on the settlement. A lawyer for Hughes declined to comment.

PaymentsMD, which launched an expanded medical payments service in 2008, began developing a separate online medical records service with a partner in 2012, the FTC said. To populate the medical records, the company altered the registration process for its billing portal to include permission for the company and its partners to contact health care providers to obtain their medical information, the agency alleged.

The company asked customers consent to the collection of their health information by signing off on four authorizations presented in small windows on the website, displaying only six lines of an extensive text at one time, the FTC alleged. Customers could accept all four authorizations by clicking one box, the agency said.

PaymentsMD customers registering for the Patient Portal billing service would have "reasonably believed" that the authorizations were for billing, not for the collection of medical records, the agency said in its complaints.

"Consumers' health information is as sensitive as it gets," Jessica Rich, director of the FTC's Bureau of Consumer Protection, said in a statement. "Using deceptive tactics to gain consumers' 'permission' to collect their full health history is contrary to the most basic privacy principles."

The medical information PaymentsMD requested included customers' prescriptions, procedures, medical diagnoses, lab tests performed and their results, and other information, the FTC said.

In all but one case, the health care providers contacted for data refused to comply with PaymentsMD's requests, the FTC said. In some cases, company requested medical information about children, the agency said.

After PaymentsMD began telling customers it was attempting to collect their health information, the company received "numerous" complaints from people who believed they had signed up only for a billing portal and not an online health record, the agency said.

Under the proposed settlements, PaymentsMD and former CEO Hughes are banned from deceiving consumers about the way they collect and use information, and they must obtain customers' express consent before collecting their health information from a third party.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's email address is grant_gross@idg.com.

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Tags governmentsecurityprivacyregulationlegalindustry verticalshealth careU.S. Federal Trade CommissionCivil lawsuitsJessica RichMichael HughesPaymentsMD

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Grant Gross

IDG News Service
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