Texas Medical Board Enjoined for Possible Antitrust Violations by Federal Court

Tuesday, June 23, 2015
By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by the Florida Bar in Health Law and Shelby Root
 
On May 29, 2015, the U.S. District Court for the Western District of Texas granted an injunction against the Texas Medical Board (TMB). The suit was brought by a company called Teladoc, Inc. Teladoc, Inc provided medical services to patients through webchats, video chats, and other telemedicine modalities. The TMB had a new regulation which prohibited this type of practice unless there was an in-person physician patient evaluation performance first. The federal court ruled that the TMB was violating anti-trust laws by artificially limiting competition. This continues the ongoing theme of federal courts slapping down state professional boards for monopolistic practices.
 
 
Texas Telemedicine Rule that was Enjoined.

On April 10, 2015, the Texas Medical Board (TMB) voted to adopt a new regulation governing the practice of telemedicine. The current Texas telemedicine regulations require the provider to establish a relationship with its patients prior to prescribing drugs or diagnosing health conditions. Also, the regulation prohibits providers from evaluating and treating patients only through online or telephone questionnaires. This regulation did not require an actual face-to-face in-person evaluation by the physician.


New Does Not Always Mean Better.

The revised regulation would have required a patient to receive an in-person examination prior to receiving future evaluations, treatments or prescriptions from a telemedicine provider. This examination may be done either through an initial face-to-face consultation with the telemedicine provider or at an established medical site with a patient site presenter. The new regulation was scheduled to go into effect June 3, 2015. To view 22 Tex. Admin. Code § 190.8(1)(L), click here.


Telemedicine Provider Strikes Back.

The Dallas based telemedicine provider, Teladoc, Inc., filed an anti-trust lawsuit in the U.S. District Court for the Western District of Texas against TMB, on April 29, 2015. The lawsuit is aimed at blocking the implementation of the new regulation. While seeking preliminary injunctive relief, Teladoc, Inc. alleged that the new regulation violates Section 1 of the Sherman Act and the Commerce Clause. To view Teladoc's press release, click here.
http://www.teladoc.com/news/2015/05/29/federal-court-rules-in-favor-of-teladoc/

On May 29, 2015, Federal Judge Robert Pitman issued a preliminary injunction against TMB. The injunction prohibited the enforcement of the revised regulation until after trial. The relief indicated that Teladoc is likely to succeed in showing that TMB is illegally limiting competition through its face-to-face visit requirement.


Knocking Out High Medical Costs.

Teladoc argued that the new regulation would increase prices and reduce choice access and innovation. The telemedicine provider presented evidence to support this claim. It pointed to estimates of the average cost of a visit to a physician or an emergency room (estimated to be $145 or $1975, respectively). These figures were compared to the $40 consultation cost with Teladoc.

In light of the shortage of physicians, the court stated it is imperative to reduce health care costs and increase access to care. Teladoc provided the court with cited research, finding that the use of telehealth services provided both of these benefits.

The court stated that an elimination of physicians providing healthcare may negatively impact not only competitor physicians, but also the consumers. The court observed that this is a "classic anti-trust injury." To read my prior blog on suppressing competition, click here.


The Destruction of Teladoc's Business Model Created Irreparable Injury.

The federal court observed that at least two federal circuit courts have acknowledged that the destruction of a business model may constitute an irreparable injury. Also, a factor in deciding a preliminary injunction is determining if there will be an irreparable injury. The court held that the destruction of Teladoc's business model was sufficient to show irreparable injury.


Is the Texas Medical Board Immune to these Allegations?

In North Carolina State Bd. of Dental Exam'rs v. FTC, 135 S. Ct. 1101 (2015), the U.S. Supreme Court addressed state action immunity for professional boards. In that case, Justice Kennedy stated immunity was not available because the Board was controlled by an "active market participants" and their decision to block services was not "actively supervised" by the state. To read my prior blog on the North Carolina Board case, click here.

As in the North Carolina Board case, the TMB is composed of members of the active market. Out of the board’s fourteen members, twelve were practicing physicians. To view the U.S. Supreme Court's decision in its entirety, click here.
 
Comments?

What are your thoughts on this case? Do you think that an initial face-to-face consultation affects the quality of care? Please leave any thoughtful comments below.


Contact a Health Care Attorney that is Experienced in the Representation of Health Care Professional.

The Health Law Firm and its attorneys are experienced in the area of commercial litigation, both simple and complex, both state court and federal court. Additionally, we have prevailed in appeals of such cases in both the state courts of appeal and the federal courts of appeal. We can represent medical groups, home health agencies, skilled nursing facilities, physicians, nurses, dentists and providers in commercial litigation cases.

To contact the Health Law Firm please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com


Sources:

Maheu, Marlene. "Federal Court Supports Teledoc in Ongoing Saga Against Texas Medical Board." Telemental Health Institute. (May 31, 2015). From:
 
http://telehealth.org/blog/texas-medical-board/

Nuzback, Kara. "Medical Board Wages War Over Telephone Treatment." Texas Medical Association. (April 2015). From:
 
http://www.texmed.org/Template.aspx?id=33123

Teladoc. "Federal Court Rues in Favor of Teladoc, Blocking Texas Medical Board Rule and Preserving Telehealth in Texas. (May 29, 2015). From:
 
http://www.teladoc.com/news/2015/05/29/federal-court-rules-in-favor-of-teladoc/

 
About the Authors: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620. Shelby Root is a summer associate at The Health Law Firm. She is a student at Barry University College of Law in Orlando.


KeyWords: Telemedicine, Telehealth, Supreme Court, Texas Medical Board, Teladoc, Antitrust, Antitrust violation, suppression of competition, illegal suppression of competition, physician, U.S. District Court, Teladoc Inc. v. Texas Medical Board, North Carolina Board of Dental Examiners v. FTC, defense attorney, defense lawyer, health law, The Health Law Firm reviews
 
 
 

"The Health Law Firm" is a registered fictitious business name of George F. Indest III, P.A. - The Health Law Firm, a Florida professional service corporation, since 1999.
Copyright © 1996-2015 The Health Law firm. All rights reserved.
 
 
6/23/2015

Like this blog? Add your public comments:

Items in bold indicate required information.