Advisory Opinion to Lee (06-26-98)

June 26, 1998

Ms. Stacy Lee
Senior Unit Manager
PMSI - Compliance
204 Woodhew
Waco, Texas 76712

Re: Sections 603(f), 609, and 612 of the Fair Credit Reporting Act

Dear Ms. Lee:

This responds to your letter about the status under the Fair Credit Reporting Act ("FCRA") of the "TelePro" service that your company, PMSI, provides to the life, health, disability income, and long-term care insurance industries.

Your letter describes the service as "procurement of medical records/attending physician statements for insurance underwriting purposes. These records are not stored or maintained. Copies are sent to PMSI and PMSI then forwards the copies on to the insurance company." In a later phone call, you stated that the only function performed by PMSI in providing the TelePro service is to receive records from health care providers, place them in a single envelope, and mail them to the insurer.

You pose four questions about the applicability of the FCRA to TelePro, which we quote verbatim in italics followed by our reply.

1. Does a copy service, such as TelePro, meet the definition of a CRA?

Probably not. Section 603(f) of the FCRA states:

The term "consumer reporting agency" means any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties, and which uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports.

The answer to your question depends on whether a service such as PMSI/Telepro constitutes "assembling" the medical records that it furnishes to its clients, because it clearly meets the other elements of the definition -- it conveys personal health information for a fee to insurers, who use the information to evaluate consumers' eligibility for insurance products offered by its clients. Because PMSI's action as you describe it is entirely mechanical and does not in any way determine the content of the material sent to the client, we believe it will be in the same position as the drug lab consultant we discuss in the enclosed Letter #1 (Islinger, 6/9/98) and probably not a CRA that is "assembling" data. If at some point PMSI does more, like the record search service that extracts information from public sources for its clients described in the enclosed Letter #2 (LeBlanc, 6/9/98), it will become a CRA.

2-3. In the event TelePro services are found to be that of a CRA, since PMSI does not maintain the records, what procedures would we need to follow to comply with FCRA? Would reordering the medical records be sufficient for disclosure? Could any associated charges imposed on the medical facility be passed on to the consumer?

Section 609 of the FCRA requires that CRAs provide "[a]ll information in the consumer's file at the time of the request" by the consumer for a disclosure of his or her personal record maintained by the agency. Even if PMSI/TelePro becomes a CRA, if it retains no file of documents it transmits to insurer clients as part of the service (or of information contained in those documents), it will have no information to disclose. If PMSI/Telepro becomes a CRA and does maintain any such file, it must make the disclosure. Section 612 limits CRA charges to consumers for file disclosures to $8.00 (an amount subject to increase based on the Consumer Price Index), and sets forth certain situations when they are required to provide this service for free.

4. If the current TelePro services are found not to be that of a CRA, but a later date, PMSI decides to maintain copies of the medical records procured, would TelePro services then be subject to FCRA disclosure requirements?

Yes. If PMSI/TelePro retains such information in its files, it would undoubtedly be a CRA "assembling" information on consumers. As such, it would have to make file disclosures as required by Section 609.

The opinions set forth in this informal staff letter are not binding on the Commission.

Sincerely yours,

Clarke W. Brinckerhoff