On October 17, 2016, the U.S. Court of Appeals for the Fifth Circuit granted the Texas Medical Board’s (“Board”) motion to voluntarily dismiss its appeal of the District Court’s decision on sovereign immunity in its latest court battle with Teladoc. Whether this signals more tolerance for the practice of telemedicine in Texas remains to be seen.
The parties have been in litigation over the Board’s limitations on the use of telemedicine for years. The dispute began in in 2011, when the Board threatened disciplinary action against Teladoc’s physicians for alleged violations of Texas law that require an in-person, face-to-face patient evaluation before providing prescriptions and other medical services to patients. Teladoc contended that its services were outside the scope of the Board’s rules governing telemedicine because the rules did not address phone consultations. The Board argued this amounted to unconscionable and misleading advertising because a “face-to-face” evaluation was nonetheless required to establish a patient relationship. Teladoc sued the Board and ultimately succeeded in having the Board’s interpretation of the statute deemed invalid as an unpublished rule.
Soon after Teladoc’s victory, the Board issued an emergency rule that explicitly required a face-to-face visit or “in-person evaluation” before a physician could issue a prescription (“Emergency Rule”). In response, Teladoc successfully obtained a temporary injunction to stay implementation, claiming the Emergency Rule did not meet administrative law requirements for issuing emergency rules, specifically “imminent peril to the public health, safety or welfare.”
In April 2015, the Board undertook a formal rulemaking process and voted to adopt the regulations proposed by the Emergency Rule. Teladoc then filed an antitrust lawsuit in federal court against the Board, arguing the restrictions on the use of telemedicine illegally limit competition. In May, before the regulations took effect, a U.S. District Court judge issued another temporary injunction, allowing providers to continue prescribing drugs for patients where a “proper professional relationship” exists (but not specifically requiring a “face-to-face” evaluation).
The Board moved to dismiss the antitrust lawsuit on several grounds, including sovereign immunity, a legal doctrine that exempts state agencies from lawsuits. The U.S. District Court judge denied the motion, finding that the Board could not claim sovereign immunity due to a lack of “active supervision” by the state. The Board appealed this decision, but has now moved to dismiss its appeal.
Teladoc did not oppose the motion, but noted “the Texas Medical Board stated at its most recent board meeting that withdrawing the appeal was ‘purely strategic,’ which raises serious questions about the motivation behind the appeal and the justification for the decision to withdraw the appeal.”
It is clear the Board does not intend to stop fighting against the application of antitrust laws to medical boards. Board minutes (available here) indicate that Texas and Wyoming are jointly sponsoring the Federation of State Medical Boards (FSMB) advocacy efforts in response to antitrust concerns. The FSMB is calling for advocacy against expansion of antitrust principles to state medical boards and is offering legal assistance to those boards facing antitrust litigation. The FSMB press release is available here.
