Federal Court denies TMB application to dismiss Teladoc case

Readers may have read our article in April this year “Can State medical boards legally prevent telehealth activity?”. click to enlargeIn that article we examined the potential impact of a case brought by the Federal Trade Commission against the North Carolina State Board of Dental Examiners. The case went all the way to the Supreme Court which determined that the State Board of Dental Examiners was not protected by immunity from anti-trust law.

Teladoc is now locked in a case with the Texas Medical Board (TMB) that is very similar to the North Carolina case and it too has gone along a similar path so far. In the latest development of this case, last week a Federal Court, the US District Court in Texas, denied the application by the TMB to dismiss a case brought by Teladoc that claims that the TMB broke anti-trust law.

What has brought Teladoc and the TMB to court in this way?

In 2003 the TMB adopted a rule which prohibits prescription of any “dangerous drug or controlled substance” without first establishing a “proper professional relationship”. This required practices such as patient history, mental status examination, physical examination, and appropriate diagnostic and laboratory testing.

In 2010 the TMB amended its telemedicine regulations and made clear that, to establish a “proper physician-patient relationship,” telemedicine providers had to conduct a physical examination of a patient. As a result Teladoc restricted the services it offered in Texas, specifically eliminating the option of video consultation.

Next year the TMB issued a letter to Teladoc, stating that rules required a “face-to-face” examination prior to prescription of a dangerous drug or controlled substance, which Teladoc allege was prompted by complaints from Texas physicians about competition from Teladoc.

Teladoc took TMB to state court in Texas and in July 2011 obtained  a temporary restraining order barring enforcement of the TMB’s letter. In December 2014 the court of appeals decided that TMB’s letter to Teladoc was not compliant with TMB’s own rules rendering it invalid.

TMB then issued an “emergency” rule on January this year, mandating a “face-to-face visit or in-person evaluation” before a physician can issue a prescription.  Teladoc sought and obtained a temporary injunction of the emergency rule in Texas state court. The TMB then voted through a rule in April this year  to adopt practices  which would require a face-to-face visit before a physician can issue a prescription to a patient, regardless of medical necessity.

As a result Teladoc filed action in the federal courts in April asserting TMB have committed a violation of antitrust law, as well as the Commerce Clause of the Constitution in adopting the new rules. The TMB sought to dismiss the claims, arguing they are barred by the statute of limitations, the TMB is immune from antitrust liability, and Teladoc have failed to state an actionable claim under the Commerce Clause.

That brings us to where we are today. These two cases highlight a philosophical conundrum: how should a profession be regulated so that those performing the regulation act for the greater good and not out of self-interest? Clearly regulators must be experts in their field and up-to-date with developments hence the use of practising professionals in these bodies. But, and this is a big but, unless all those professional are supremely altruistic and utterly independent there will be a question of self interest. One alternate and successful model, seen in some European countries is to have regulation carried out by salaried experts recruited into the regulator. In addition the regulator’s remit is to always act in the best interest of the end user such as the patients in the case of health regulation.

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