Teladoc Sues Texas Over Impending Telemedicine Restrictions

Ken Terry

April 30, 2015

Telemedicine firm Teladoc has filed a federal antitrust suit against the Texas Medical Board (TMB), asking for an injunction against its newly adopted rule that prohibits physicians from treating patients over the telephone without first meeting with them in person or face to face.

The new rule is scheduled to go into effect June 3.

Teladoc earlier sued the TMB after it received a letter from the board saying that the physicians who provided its consultations were violating board policy. It lost its case in a lower court but won on appeal last December, forcing the TMB to revise the language in its policy. The board issued a new proposed rule in February and adopted it April 10.

Teladoc's lawsuit alleges that the TMB acted not because of concern about the safety of remote consultations but because it was concerned about the competitive threat to physicians.

"It is clear that the medical board acted only when Teladoc consultations became sufficiently numerous to be perceived as a competitive threat to brick-and-mortar physician practices," said Jason Gorevic, Teladoc's chief executive officer, in a news release.

The suit further cites the long-established practice of "on-call" coverage — which is not prohibited under TMB policy ― as evidence that telehealth does not endanger patient safety.

Nearly all of the written comments that the board received during the comment period opposed the rule change, the suit claims. Two of the three comments supporting it came from a "trade association of physicians," Teladoc says.

The TMB did not have a statement at press time. But in a news release issued April 14, the board said, "The [new] rules expand opportunities for patients to interact with their physicians beyond the traditional office visit and clarify that a physician-patient relationship can be established through a 'face-to-face' visit held either in person or via telemedicine."

The latter assertion refers to the TMB's earlier-adopted rules for video consultations. Those rules allow a patient to consult remotely with a physician they haven't met as long as it's in the presence of another medical provider.

The Teladoc suit claims that "if the rule takes effect, it would reduce output and raise prices for physician services.... It would also cause dramatic and irreparable injury to Teladoc, which will be effectively put out of business in Texas and which will find its business nationwide in jeopardy."

Texas provides 2.4 million of Teladoc's nearly 11 million customers, with about 90% of the encounters by telephone, according to an article in Politico.

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