Fair Credit Reporting Act

On February 15, 2017, Mayor Muriel Bowser signed the “Fair Credit in Employment Amendment Act of 2016” (“Act”) (D.C. Act A21-0673) previously passed by the D.C. Council. The Act amends the Human Rights Act of 1977 to add “credit information” as a trait protected from discrimination and makes it a discriminatory practice for most employers to directly or indirectly require, request, suggest, or cause an employee (prospective or current) to submit credit information, or use, accept, refer to, or inquire into an employee’s credit information. As discussed in our earlier advisory, the Act will take effect following a 30-day period of congressional review per the District of Columbia Home Rule Act, and publication in the D.C. Register, and shall apply upon inclusion of its fiscal effect in an approved budget and financial plan. The latter may not occur until this summer

It is readily apparent that electronic media and the internet are making it much easier to collect, organize and maintain data regarding individuals in our society. This is as true with respect to health care employees, and physicians in particular, as it is of anyone else. Information about physicians’ conduct, publications, and interactions with industry, as well as their regulatory, investigatory, and disciplinary history, is increasingly available through public sources. Information about practice patterns and quality of clinical performance can be readily analyzed, as data gathering tools begin to proliferate, and “analytics” is a rapidly growing field. Perhaps by September 30, 2013 (under the current regulatory timetable), even more information will become available, as the public reporting provisions of the Physician Payment Sunshine aspect of the Patient Protection and Affordable Care Act  become operational.  Various state counterparts are already in effect.  These trends coincide with the development of new paradigms for care delivery, which will require hospitals, health plans, and other providers to learn about the quality and productivity of their medical staff members and, perhaps more importantly, prospective members of the medical staff.  New payment methodologies also drive the need for comprehensive information about clinicians and their practice patterns.

As businesses begin to take advantage of these developments, collecting, organizing and analyzing such data to sell to end users in the healthcare industry, the applicability of the Fair Credit Reporting Act (FCRA) can easily be overlooked. The FCRA, better known for its application in the credit arena, regulates the collection, dissemination and use of “consumer information” for employment purposes as well, and provides various protections for individuals related to the use and accuracy of this information. “Employment” for the purposes of the FCRA is very broadly defined, and likely includes deciding whether to engage physicians in various capacities, as well as whether to initiate, restrict or terminate clinical privileges or membership on the medical staff.

Requirements of FCRA in these circumstances include:

• Individuals must consent to the report being given to the employer;

• Individuals must be informed of information used against them, and be advised of the identity of the entity providing the information;

• Individuals must have the right to dispute incomplete or inaccurate information; and

• Individuals have the right to obtain all of the information concerning them that is in the Credit Reporting Agency’s files.

Many states have consumer protection and reporting laws as well, with analogous, albeit differing, requirements.

In this age of free flowing information, hospitals, health plans, other providers, and suppliers of information to them should (i) develop an understanding of how technology and the law interact to increase the amount of information about them that is available; and (ii) be cognizant of requirements beyond the healthcare environment, such as those found in the Fair Credit Reporting Act, that apply to and may limit the manner in which the information is gathered and used.

You may also be interested in our recent blog entitled FTC Warns That Background Searches via Mobile App May Violate the Fair Credit Reporting Act.

 by Jeffrey M. Landes, Susan Gross Sholinsky, Steven M. Swirsky, and Jennifer A. Goldman

On January 25, 2012, the Federal Trade Commission (“FTC”) sent warning letters to three companies that market, in total, six mobile phone applications (“Apps”) that provide users with background check reports. In the warning letters, the FTC states that the Apps may violate the Fair Credit Reporting Act (“FCRA”). According to a press release issued by the FTC on February 7, 2012, the FTC cautioned the Apps’ marketers that, if they have reason to believe that the background reports provided will be used for employment screening, housing, credit, or other similar purposes, both the users of the Apps and the marketers of the Apps must comply with the FCRA.

 Read the full advisory online