[Federal Register Volume 79, Number 237 (Wednesday, December 10, 2014)]
[Notices]
[Pages 73310-73312]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-28973]


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FEDERAL TRADE COMMISSION

[File No. 132 3088]


Michael C. Hughes; Analysis of Proposed Consent Order To Aid 
Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting deceptive acts or practices. The 
attached Analysis to Aid Public Comment describes both the allegations 
in the draft complaint and the terms of the consent order--embodied in 
the consent agreement--that would settle these allegations.

DATES: Comments must be received on or before January 2, 2015.

ADDRESSES: Interested parties may file a comment at https://ftcpublic.commentworks.com/ftc/michaelchughesconsent online or on 
paper, by following the instructions in the Request for Comment part of 
the SUPPLEMENTARY INFORMATION section

[[Page 73311]]

below. Write ``Michael C. Hughes--Consent Agreement; File No. 132 
3088'' on your comment and file your comment online at https://ftcpublic.commentworks.com/ftc/michaelchughesconsent by following the 
instructions on the web-based form. If you prefer to file your comment 
on paper, write ``Michael C. Hughes--Consent Agreement; File No. 132 
3088'' on your comment and on the envelope, and mail your comment to 
the following address: Federal Trade Commission, Office of the 
Secretary, 600 Pennsylvania Avenue NW., Suite CC-5610 (Annex D), 
Washington, DC 20580, or deliver your comment to the following address: 
Federal Trade Commission, Office of the Secretary, Constitution Center, 
400 7th Street SW., 5th Floor, Suite 5610 (Annex D), Washington, DC 
20024.

FOR FURTHER INFORMATION CONTACT: Jacqueline Connor, Bureau of Consumber 
Protection, (202-326-2844), 600 Pennsylvania Avenue NW., Washington, DC 
20580.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, 
notice is hereby given that the above-captioned consent agreement 
containing consent order to cease and desist, having been filed with 
and accepted, subject to final approval, by the Commission, has been 
placed on the public record for a period of thirty (30) days. The 
following Analysis to Aid Public Comment describes the terms of the 
consent agreement, and the allegations in the complaint. An electronic 
copy of the full text of the consent agreement package can be obtained 
from the FTC Home Page (for December 3, 2014), on the World Wide Web, 
at http://www.ftc.gov/os/actions.shtm.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before January 2, 2015. 
Write ``Michael C. Hughes--Consent Agreement; File No. 132 3088'' on 
your comment. Your comment--including your name and your state--will be 
placed on the public record of this proceeding, including, to the 
extent practicable, on the public Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the 
Commission tries to remove individuals' home contact information from 
comments before placing them on the Commission Web site.
    Because your comment will be made public, you are solely 
responsible for making sure that your comment does not include any 
sensitive personal information, like anyone's Social Security number, 
date of birth, driver's license number or other state identification 
number or foreign country equivalent, passport number, financial 
account number, or credit or debit card number. You are also solely 
responsible for making sure that your comment does not include any 
sensitive health information, like medical records or other 
individually identifiable health information. In addition, do not 
include any ``[t]rade secret or any commercial or financial information 
which . . . is privileged or confidential,'' as discussed in Section 
6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 
4.10(a)(2). In particular, do not include competitively sensitive 
information such as costs, sales statistics, inventories, formulas, 
patterns, devices, manufacturing processes, or customer names.
    If you want the Commission to give your comment confidential 
treatment, you must file it in paper form, with a request for 
confidential treatment, and you have to follow the procedure explained 
in FTC Rule 4.9(c), 16 CFR Sec.  4.9(c).\1\ Your comment will be kept 
confidential only if the FTC General Counsel, in his or her sole 
discretion, grants your request in accordance with the law and the 
public interest.
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    \1\ In particular, the written request for confidential 
treatment that accompanies the comment must include the factual and 
legal basis for the request, and must identify the specific portions 
of the comment to be withheld from the public record. See FTC Rule 
4.9(c), 16 CFR 4.9(c).
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    Postal mail addressed to the Commission is subject to delay due to 
heightened security screening. As a result, we encourage you to submit 
your comments online. To make sure that the Commission considers your 
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/michaelchughesconsent by following the instructions on the web-
based form. If this Notice appears at http://www.regulations.gov/#!home, you also may file a comment through that Web site.
    If you file your comment on paper, write ``Michael C. Hughes--
Consent Agreement; File No. 132 3088'' on your comment and on the 
envelope, and mail your comment to the following address: Federal Trade 
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite 
CC-5610 (Annex D), Washington, DC 20580, or deliver your comment to the 
following address: Federal Trade Commission, Office of the Secretary, 
Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex 
D), Washington, DC 20024. If possible, submit your paper comment to the 
Commission by courier or overnight service.
    Visit the Commission Web site at http://www.ftc.gov to read this 
Notice and the news release describing it. The FTC Act and other laws 
that the Commission administers permit the collection of public 
comments to consider and use in this proceeding as appropriate. The 
Commission will consider all timely and responsive public comments that 
it receives on or before January 2, 2015. You can find more 
information, including routine uses permitted by the Privacy Act, in 
the Commission's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

Analysis of Proposed Consent Order To Aid Public Comment

    The Federal Trade Commission has accepted, subject to final 
approval, a consent order applicable to Michael C. Hughes (``Hughes'').
    The proposed consent order has been placed on the public record for 
thirty (30) days for receipt of comments by interested persons. 
Comments received during this period will become part of the public 
record. After thirty (30) days, the Commission will again review the 
agreement and the comments received, and will decide whether it should 
withdraw from the agreement and take appropriate action or make final 
the agreement's proposed order.
    Michael C. Hughes is the former Chief Executive Officer, sole 
employee, and part owner of PaymentsMD, LLC (``PaymentsMD''). 
PaymentsMD's principal line of business is the delivery of electronic 
billing records and the collection of accounts receivable for medical 
providers. In December 2011, PaymentsMD launched a free ``Patient 
Portal'' product that enabled consumers to pay their bills and to view 
their balance, payments made, adjustments taken, and information for 
other service dates.
    The Commission's complaint alleges that PaymentsMD, under Hughes' 
direction and control, deceived consumers regarding the collection of 
consumers' sensitive health information from third parties. In June 
2012, PaymentsMD entered into an agreement with Metis Health LLC 
(``Metis Health'') to develop an entirely new service called Patient 
Health Report, a fee-based service that would enable consumers to 
access, review, and manage their consolidated health records through a 
Patient Portal account. In order to populate the Patient Health Report, 
PaymentsMD, under Hughes' direction and control, obtained consumers' 
authorization to collect sensitive health information for one purpose--
to track

[[Page 73312]]

their medical bills--and then used that authority to attempt to collect 
a massive amount of sensitive health information, including treatment 
information, from third parties without consumers' knowledge or 
consent. Based on such authorization, sensitive health information 
about everyone who registered for the Patient Portal was then requested 
from a large number of health plans, pharmacies, and a medical lab.
    The first count of the Commission's complaint alleges that Hughes, 
through his direction and control of PaymentsMD, represented that 
consumers registering for their free Patient Portal billing service 
could access and review their medical payment history, but failed to 
disclose adequately that PaymentsMD would also engage in a 
comprehensive collection of consumers' sensitive health information for 
a Patient Health Report. The second count alleges that Hughes, through 
his direction and control of PaymentsMD, deceptively represented that 
the consumers' authorizations were to be used exclusively to provide 
the billing service.
    The proposed order contains provisions designed to prevent Hughes 
from engaging in the future in practices similar to those alleged in 
the complaint. Part I prohibits Hughes or any entity he owns or 
controls from misrepresenting the extent to which he or any entity he 
owns or controls uses, maintains, and protects the privacy, 
confidentiality, and security of covered information collected from or 
about consumers, including but not limited to (1) the services for 
which consumers are being enrolled as part of any sign-up process; (2) 
the extent to which he will share covered information with, or seek 
covered information from, third parties; and (3) the purpose(s) for 
which covered information collected from third parties will be used. 
Part II requires Hughes or any entity he owns or controls to clearly 
and prominently disclose practices regarding the collection, use, 
storage, disclosure or sharing of health information prior to seeking 
authorization to collect health information from a third party, and to 
obtain affirmative express consent from consumers prior to collecting 
health information from a third party.
    Part III prohibits Hughes or any entity he owns or controls from 
using, collecting, or permitting any third party to use or maintain any 
covered information pursuant to any authorization obtained prior to the 
date of the order from consumers registering for the Patient Portal. 
Hughes also must, within sixty days, delete all covered information in 
his possession or control that was collected in relation to the Patient 
Health Report service.
    Parts IV through VIII of the proposed order are reporting and 
compliance provisions. Part IV requires Hughes to retain documents 
relating to his compliance with the order. The order requires that 
Hughes retain all of the documents for a five-year period. Part V 
requires dissemination of the order for a period of five years to all 
current and future subsidiaries, principals, officers, directors, and 
managers, and to persons with responsibilities relating to the subject 
matter of the order for any business that Hughes is the majority owner 
of or controls directly or indirectly. Part VI ensures notification, 
for a period of five years, to the FTC of changes to Hughes' current 
business or employment, or his affiliation with any new business or 
employment. Part VII mandates that Hughes submit a compliance report to 
the FTC within 60 days, and periodically thereafter as requested. Part 
VIII is a provision ``sunsetting'' the order after twenty (20) years, 
with certain exceptions.
    The purpose of this analysis is to facilitate public comment on the 
Consent Agreement, and it is not intended to constitute an official 
interpretation of the proposed Decision and Order or to modify its 
terms in any way.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2014-28973 Filed 12-9-14; 8:45 am]
BILLING CODE 6750-01-P