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Teladoc Wins Another Skirmish in Texas Telemedicine Tussle

In the latest move in a five-year battle over phone-based telemedicine in the Lone Star State, a Texas judge shoots down the Texas Medical Board's bid to have Teladoc's antitrust lawsuit thrown out.

By Eric Wicklund

- Advocates for telephone-based telehealth services have won another court skirmish with a Texas judge’s refusal this week to drop Teladoc’s antitrust lawsuit against the Texas Medical Board.

The ruling wasn’t entirely unexpected. U.S. District Judge Robert Pitman had issued an injunction this past June after the board sought to enforce a new rule that physicians first meet face-to-face with a new patient before prescribing medications. Teladoc, which does roughly 70 percent of its business by phone, protested vigorously, and filed suit.

Pitman ruled against the medical board on three specific points. He ruled that the four-year statute of limitations for antitrust cases had not expired because the issue has been continuously debated since 2010; that Teladoc’s claims that board was violating terms of the Commerce Clause were substantial enough to be addressed in court; and that the board did not have “state actor immunity” to antitrust lawsuits.

The latest skirmish in a five-year battle began in January, when the court sought to institute an emergency order that would ban the telephone-based visits, except under certain circumstances. When that effort was shot down by the court on the basis that it wasn’t an emergency, the board voted 13-1 in April to make it a part of their bylaws, only to see Teladoc file suit on April 29, charging the board with violating antitrust laws and intentionally harming its business model.

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.

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“We are very pleased with the court’s decision and the growing wave of support of telehealth,” Gorevic said in a press release, noting the company has operated in Texas for a decade. “This ruling is only the latest in a string of legal victories for us in Texas, in federal and state courts. As a champion for patient access to affordable, high quality healthcare, we view this decision as a major victory for consumers. We’re also optimistic that this decision will lead the TMB to reconsider its attempts to block patient access to telehealth.”

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, 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.

Earlier this year, Robert M. Wolin of the law firm of Baker & Hostetler said the Texas board is dead-set against the practice of "PhysTexting." It first wants a "defined physician-patient relationship," he said, and defines that as “diagnosis through the use of acceptable medical practices, which includes documenting and performing: … (a) physical examination that must be performed by either a face-to-face visit or in-person evaluation … and appropriate diagnostic and laboratory testing.”

The dispute has even affected the American Medical Association, which has twice stalled in efforts to develop a set of ethics for telemedicine use.

READ MORE: Ohio Board Relaxes Telemedicine Policies to Allow Prescribing

In June, and again in November, the AMA's House of Delegates delayed action on guidelines prepared by the organization's Council on Ethical and Judicial Affairs, which defines a "valid patient-physician relationship" that a physician must establish in treating new patients. The CEJA guidelines say this relationship can be accomplished "in person or virtually through real-time audio and video technology."

“There is no requirement here of any form of inpatient, face-to-face interaction,” Arlo Weltge, MD, PhD, MPH, an AMA alternate delegate from Texas, said of the AMA's proposed guidelines during the June debate. “For physical diagnosis, there needs to be a physical exam that can be done either with an initial face-to-face, or it can be done with a presenter who is seeing the patient in consultation.”

"The unintended consequence of the way (the AMA's proposed ethical guidelines are) written means that anybody can set up a remote station and prescribe medications and, if you will, become an Internet pill-mill," Weltge argued.

The latest court ruling caps a busy year for Teladoc, which launched an IPO on July 1 and is also mired in a court battle with fellow telehealth provider American Well over patent protections.

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