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FTC Sides With Teladoc in Texas Telehealth Battle

In a letter supporting the telehealth company, the FTC says the Texas Medical Board is favoring doctors who want to limit telehealth to promote their own business.

By Eric Wicklund

- Teladoc is gaining new support in its battle with the Texas Medical Board over proposed telehealth restrictions.

The Federal Trade Commission last week sent a 44-page letter to the U.S. 5th Circuit Court that criticizes Texas medical officials for trying to impose harsh restrictions on telehealth in Texas.

"There is no evidence that any disinterested state official reviewed the (Texas Medical Board) rules at issue to determine whether they promote state regulatory policy rather than TMB doctors’ private interests in excluding telehealth - and its lower prices - from the Texas market," the FTC wrote.

Dallas-based Teladoc, a national provider that does most of its business online and by phone, filed suit this year in federal court against the Texas Medical Board, charging that the board is violating federal antitrust laws in hindering the company’s business.

The 19-member medical board recently filed a motion to have the suit dismissed. That drew a sharp response from Teladoc, as well as new letters of support for the telehealth company.

“Defendants argue that the risk of self-dealing is greatest for price fixing,” Teladoc officials said in a brief filed earlier this month. “But it is equally anticompetitive for a group of doctors to conspire to exclude competition to keep prices high and reduce access to medical care.”

The six-year dispute came to a head in January of 2015, when the board tried to amend its rules to prevent certain telehealth consults between a doctor and new patient until both had first met in person. Board members, saying they were acting to preserve the doctor-patient relationship and the doctor’s ability to deliver quality care, argued that online questionnaires or Q&As through e-mail, chat or phone are “inadequate to establish a defined physician-patient relationship.”

U.S. District Judge Robert Pitman stayed the so-called emergency legislation, Rule 190.8, and efforts by the board to enforce that rule have been blocked.

Teladoc CEO Jason Gorevic and chief medical officer Henry DePhillips have long argued that the company’s services aren’t limited to the telephone, and that the physician has access to a patient’s medical records during the phone call. In addition, the physician can arrange for an online, video or face-to-face meeting with a specialist if needed.

In addition to the FTC letter, the ERISA Industry Committee (ERIC) filed an amicus brief supporting Teladoc. The organization, which lobbies on behalf of employee health plans run by the nation’s largest businesses, said the board’s action “has all the hallmarks of a market-protective action, including a reliance on speculative and anecdotal ‘evidence,’ an overbroad response, and an illogical carve-out to protect traditional market participants.”

“Telemedicine is good for consumers. It can increase patient access to care without compromising the quality of care,” Allison Wils, director of health policy for ERIC, wrote. Rule 190.8’s “effective ban on direct care telemedicine protects traditional market participants at the expense of telemedicine providers, plan sponsors and patients.”

“We believe when the court explores the justification for the rule at issue, it will find that the rule was created, not out of concern for maintaining quality healthcare standards, but out of an interest for market protection,” Wils concluded.

Others that have come out in support of Teladoc include the Texas Association of Business, the Cato Institute, more than 50 antitrust law professors and MDLIve.

Teladoc’s opponents, which include the Texas Medical Association, have argued that a physician should meet a new patient in person before issuing a prescription. In September 2015, Texas’ Attorney General told a federal judge that the Texas Medical Board was within its rights to create the law, and that Teladoc was incorrect in arguing that the law singles them out.

"The plaintiffs' selective out-of-context quotations from Supreme Court cases cannot obscure the plain fact that (the) contested rule applies equally to all physicians, wherever they are located,” attorneys for the AG’s office wrote in a 41-page document.

Dig Deeper:

Could the Texas Telehealth Battle Be Ready for a Truce?

Texas Takes Heat for its Telemedicine Restrictions

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