Texas Legislature Takes Steps to Protect Consumers from Misleading Healthcare Information: What Lawyers Need to Know

By Neil Issar, Haynes and Boone, LLP

It can be a daunting challenge for consumers to separate true advertising claims from false or misleading ones. This is especially true for advertising claims concerning drugs, medical devices, and other healthcare matters, as an estimated 80 million Americans have limited health literacy.[1] This segment of the population has consistently demonstrated a poorer ability to comply with medication prescriptions and to interpret labels and health messages, and, as a result, is at risk for worse health outcomes and increased healthcare costs.[2]

While agencies such as the Federal Trade Commission, Consumer Financial Protection Bureau, and Food and Drug Administration work together to regulate advertising directed to consumers, Texas recently took significant legislative steps to protect consumers from false and misleading healthcare information in advertising. The 86th Texas Legislature passed two bills that set their crosshairs on (1) television advertisements for legal services that may lead viewers to make unfounded healthcare decisions, and (2) advertising and information at freestanding emergency rooms that mislead consumers about pricing and insurance coverage.

Senate Bill 1189, filed by Senator Dawn Buckingham, imposes new limitations on attorneys and firms that advertise legal services for prescription drugs, medical devices, and other healthcare matters. Various independent organizations and public interest groups had raised concerns that advertising by attorneys was becoming alarmingly pervasive. A study found that advertisers for legal services and/or soliciting legal claims spent over $23 million to purchase more than 190,000 advertisements in Texas’s largest media markets over a six-month period last year.[3] In Dallas-Fort Worth alone, there were eleven times as many local legal service advertisements as advertisements for home centers and hardware stores. There were also indicators that many of these legal service advertisements contained unchecked, misleading, and/or inflammatory medical information, which could, for example, frighten consumers into discontinuing use of a necessary medication.[4]

To address these concerns, Senate Bill 1189 amends the Texas Government Code to prohibit television advertisements for legal services from misrepresenting themselves as advertisements offering professional, medical, or government agency advice about medications or medical devices. It also prohibits attorneys from using phrases like “medical alert,” “health alert,” or “public service announcement,” or saying a product has been recalled when it has not, and requires that advertisements related to prescription drugs advise viewers not to stop taking their medication without consulting a physician.

Further, the bill imposes several visual and verbal disclosure and warning requirements:

Sec. 81.153. REQUIRED WARNINGS AND DISCLOSURES. (a) Requires an advertisement for legal services to state, both verbally and visually:

  • at the beginning of the advertisement, “This is a paid advertisement for legal services”;
  • the identity of the sponsor of the advertisement; and
  • either:
  • the identity of the attorney or law firm primarily responsible for providing solicited legal services to a person who engages the attorney or law firm in response to the advertisement; or
  • the manner in which a responding person’s case is referred to an attorney or law firm if the sponsor of the advertisement is not legally authorized to provide legal services to clients

The visual statement must be presented clearly, conspicuously, and for a sufficient length of time for a viewer to see and read the statement, while the verbal statement must be audible, intelligible, and presented with equal prominence as the other parts of the advertisement. Any violation of the new law will be considered a violation of the Deceptive Trade Practices Act, and it would require the attorney general or a county or district attorney to bring an enforcement action against the violating lawyer or firm.

Similar concerns about misleading healthcare information have been raised in the context of freestanding emergency care facilities. For example, the AARP reviewed 213 such facilities in 2018 and found 60 percent confusingly suggested patients would have in-network coverage despite also stating that they do not or may not participate in insurance networks.[5] House Bill 2041, filed by Representative Tom Oliverson, addresses concerns about confusing information and misleading advertising by requiring these facilities to provide clearer written disclosures regarding fees and health plan network status.

Specifically, the bill amends the Texas Health and Safety Code to require freestanding emergency care facilities to provide patients, or their legal representatives, with a written disclosure statement with (1) the facility’s observation and facility fees that may result from a patient’s visit, and (2) the health benefit plans in which the facility is a network provider (or stating that the facility is an out-of-network provider for all health benefit plans). This disclosure statement must include a place for the patient or legal representative and a facility employee to sign and date the disclosure. In addition, a facility must the statement annually and provide each patient with a physical copy of the disclosure statement even if the patient refuses or is unable to sign the statement.

House Bill 2041 also prohibits certain advertising by freestanding emergency care facilities:

Sec. 254.157. CERTAIN ADVERTISING PROHIBITED.

  • Prohibits a facility from advertising or holding itself out as a network provider, including by stating that the facility “takes” or “accepts” any insurer, health maintenance organization, health benefit plan, or health benefit plan network, unless the facility is a network provider of a health benefit plan issuer.
  • Prohibits a facility from posting the name or logo of a health benefit plan issuer in any signage or marketing materials if the facility is an out-of-network provider for all of the issuer’s health benefit plans.

As with Senate Bill 1189, violations of the above advertising provisions will be considered a violation of the Deceptive Trade Practices Act.

The new laws, which go into effect on September 1st, have broad implications in a world where legislators and lawyers must balance the rapid evolution of advertising strategies with the protection of consumers, particularly in the healthcare space. As such, attorneys with emergency care clients should preemptively ensure their compliance with the new disclosure and advertising requirements pertaining to fees and insurance coverage. And attorneys themselves must be careful to include the new required disclosures and warnings in any television advertisements of their services or advertisements soliciting clients.

 

Neil Issar is an associate in the Government Investigations and Securities Litigation Practice Group at Haynes and Boone, LLP. His practice focuses on government investigations, white collar defense, fraud and abuse laws, navigation of regulatory and compliance issues involving the healthcare industry, and the defense of healthcare and other clients in litigation. Contact Neil at neil.issar@haynesboone.com.

[1] Lauren Hersh, et al., Health Literacy in Primary Care Practice, 92 Am. Fam. Physician 118, 118 (2015).

[2] Nancy D. Berkman et al., Low Health Literacy and Health Outcomes: An Updated Systematic Review, 155 Ann. Intern. Med. 97, 99-102 (2011).

[3] Press Release, American Tort Reform Association, Report: $23.3 Million Spent by Trial Lawyers on Advertising in Texas TV Markets (Mar. 21, 2019), http://www.atra.org/2019/03/21/report-23-million-spent-trial-lawyers-advertising-texas-tv-markets/.

[4] See, e.g., John O’Brien, Ads That Can Kill: Lawyers Scare Patients Out Of Taking Medication, Legal Reform Group Says, Forbes (Oct. 25, 2017), https://www.forbes.com/sites/legalnewsline/2017/10/25/ads-that-can-kill-lawyers-scare-patients-out-of-taking-medication-legal-reform-group-says.

[5] Mark Hollis, HB 2041 Aims to Protect Patients of Freestanding Emergency Rooms, AARP (Feb. 20, 2019), https://states.aarp.org/texas/hb-2041-aims-to-protect-patients-of-freestanding-emergency-rooms.

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