Can State medical boards legally prevent telehealth activity?

This is the question that arises out of a recent ruling by the United States Supreme Court, not on anything related to telehealth but on teeth whitening!

The case was between the North Carolina State Board of Dental Examiners and the Federal Trade Commission. The Board had requested non-dentist teeth whitening practitioners to desist from carrying out these activities and was challenged on the grounds that the Board did not have authority to do so and was acting in an anti-competitive way. The challenge went all the way to the Supreme Court which upheld the lower court decision on the grounds that even though the Board is, in fact, an agency of the State its action must still be supervised by the State in order to enjoy anti-trust immunity. This is analysed by Eric M Fraser in the SCOTUS blog.

It is thought that the State Medical Boards in the United States also have similar rules of governance and therefore do not qualify for immunity from anti-trust law that some State agencies have. This has led to speculation that any restrictions imposed by a State Medical Board on a licensed medical practitioner with regard to the use of telehealth could be considered an anti-competitive action.

A brief look at the Supreme Court judgement on the North Carolina case is interesting. North Carolina’s Dental Practice Act provides that the North Carolina State Board of Dental Examiners is “the agency of the State for the regulation of the practice of dentistry.” The Board’s principal duty is to create, administer, and enforce a licensing system for dentists; and six of its eight members must be licensed, practicing dentists.

According to Oyez “in 2003, non-dentists began offering teeth-whitening services to consumers in mall kiosks and salons across the state.” The Act does not specify that teeth whitening is “the practice of dentistry.” Nonetheless, after dentists complained to the Board that non-dentists were charging lower prices for such services than dentists did, the Board issued at least 47 official cease-and-desist letters to non-dentist teeth whitening service providers and product manufacturers, often warning that the unlicensed practice of dentistry is a crime. This and other related Board actions led non-dentists to cease offering teeth whitening services in North Carolina.

The Federal Trade Commission filed an administrative complaint, alleging that the Board’s concerted action to exclude non-dentists from the market for teeth whitening services in North Carolina constituted an anticompetitive and unfair method of competition under the Federal Trade Commission Act. An Administrative Law Judge denied the Board’s motion to dismiss on the ground of state-action immunity. The FTC sustained that ruling, reasoning that even if the Board had acted pursuant to a clearly articulated state policy to displace competition, the Board must be actively supervised by the State to claim immunity, which it was not. After a hearing on the merits, the judge determined that the Board had unreasonably restrained trade in violation of antitrust law.

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