Teladoc Sues Texas Medical Board Over Telehealth Restrictions

May 1, 2015 in News

On Wednesday, telehealth services provider Teladoc filed a lawsuit in federal court against the Texas Medical Board, alleging that the board’s new state telehealth restrictions violate antitrust laws and stifle competition, Austin American-Statesman/Government Technology reports (Roser, Austin American-Statesman/Government Technology, 4/30).

Background

In January, the medical board issued an emergency rule prohibiting physicians from prescribing drugs via telehealth without meeting with a patient in-person. The ruling came in part as the result of a dispute with Dallas-based Teladoc that began in 2011 (iHealthBeat, 4/13).

Teladoc sued over the restrictions, alleging that the emergency rule violates the Texas Administrative Procedure Act, noting that the board has “created a bogus emergency” to require in-person visits (iHealthBeat, 1/26).

In April, the Texas Medical Board then voted 13-1 to prohibit the use of telehealth in the state for prescribing drugs or diagnosing conditions except in limited circumstances.

According to the rules, “[Q]uestions and answers exchanged through email, electronic text, or chat or telephonic evaluation of or consultation with a patient” will not adequately establish the doctor-patient relationship required to diagnose conditions or prescribe drugs.

The new rule allows for certain exceptions in which a physician can diagnose conditions or prescribe medications via phone or video, including if:

  • The patient is at a health care facility, including a clinic, hospital or pharmacy; and
  • Another health care worker — such as a nurse practitioner or physician assistant — is with the patient.
  • Mental health telehealth visits also are exempt from the new rules.

The new rules are set to take effect June 3 (iHealthBeat, 4/13).

Details of New Lawsuit

According to MobiHealthNews, Teladoc in its most recent lawsuit alleges that the medical board violated the Sherman Antitrust Act by approving restrictions that explicitly discourage competition (Comstock, MobiHealthNews, 4/30).

Specifically, the suit argues that the board is attempting to prevent out-of-state doctors from competing with those in Texas.

Teladoc CEO Jason Gorevic said the lawsuit “is really about” the board “depressing competition by eliminating telehealth as an option for the consumer.” He added, “This has the effect of limiting [physician] supply, raising prices and unfairly restricting trade among medical professionals.”

However, board members have said the rules provide accountability and serve to protect patients.

In an email, medical board spokesperson Jarrett Schneider said the board “stands by the rules as adopted but cannot comment any further due to ongoing litigation” (Austin American-Statesman/Government Technology, 4/30).

Potential Outcomes

According to Stuart Gerson — a lawyer with Epstein Becker Green and former acting U.S. Attorney General — the case likely hinges on whether:

  • The medical board’s rule is in “furtherance of a well-articulated state policy”; and
  • There is “active supervision” by the state.

Gerson noted that Teladoc could “prevail” because of Texas’ lack of active supervision. However, the board then could seek to pass the rule through legislation, according to MobiHealthNews (MobiHealthNews, 4/30).

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