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Texas Telemedicine Law Prompts Feds to Close Medical Board Probe

The Federal Trade Commission has ended its investigation of the Texas Medical Board, saying Texas' new telemedicine law ensures that telehealth and telemedicine will expand in the Lone Star State without interference.

Source: ThinkStock

By Eric Wicklund

- Federal officials have closed their investigation of the Texas Medical Board over charges the board sought to unfairly restrict telemedicine providers.

The Federal Trade Commission voted 2-0 to end its probe shortly after Gov. Greg Abbot signed sweeping new telemedicine regulations into law. The new law included a provision allowing doctors to establish a doctor-patient relationship through telehealth, rather than in person, and made Texas the last state to drop the in-person requirement for first-time visits between a doctor and patient.

The legislation, SB 1107/HB 2697, culminated roughly a year of negotiations between supporters and critics of telemedicine over how healthcare providers should be allowed to use the technology.

In a letter issued June 21, Acting FTC Chairman Maureen Ohlhausen said the board was ending its probe because the new law expands access to telehealth and telemedicine in the Lone Star State while addressing anti-competitive issues raised by the TMB’s efforts to curb digital health services.

“State legislatures are generally free to structure local markets to promote policy goals other than competition,” the letter stated.  “State legislatures may also promulgate laws that promote competitive free markets. Here the Texas telemedicine law passed by the legislature and signed by the governor is likely to promote competition and expand consumer choice for healthcare services.”

READ MORE: Examining the Rocky Road to Telehealth Parity

The FTC approves of the new law, Ohlhausen pointed out in her letter, because it:

  • Prevents the TMB and other regulatory agencies from adopting rules that impose a higher standard of care for telemedicine or telehealth services than would be required for in-person services;
  • Overrides current regulations that block telemedicine or telehealth providers from providing healthcare services, by expressly allowing a practitioner-patient relationship to be established through the use of telemedicine or telehealth services; and
  • Repeals an earlier law that allowed the TMB to adopt rules requiring an in-person consultation within a designated period following an initial telemedicine appointment.

The FTC’s interest in Texas was spurred by a seven-year battle between the TMB and Teladoc, a Dallas-based national telehealth vendor that had sought to expand its at-that-time primarily phone-based platform into the state. In January 2015, the TMB tried to enact emergency legislation requiring doctors to have an in-person meeting with new patients before moving to telehealth.

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.

The board’s action was blocked by a U.S. District judge and became the subject of a lawsuit filed by Teladoc, which charged that the board was violating federal antitrust laws.

It also made Texas the centerpoint in a national debate over telemedicine ethics, with several states debating how to enact laws that would hold telehealth and mHealth to the same standards as in-person healthcare. The issue even caused the American Medical Association to drag out its conversation over telemedicine ethics for about a year before the organization adopted new rules.

READ MORE: Is Telehealth Redefining the ‘Doctor-Patient Relationship’?

The seeds for a resolution in Texas were planted in 2016 when several groups, including the Texas Medical Association, Texas Hospital Association, Texas Academy of Family Physicians, the University of Texas and the Texas e-Healthcare Alliance, met behind closed doors to hash out new telemedicine guidelines.

That led State Sen. Perry Schwertner, chairman of the Senate Committee on Health and Human Services and an orthopedic surgeon, to submit his bill in February, with State Rep. Four Price submitting a similar bill to the House. The bills were approved this past May and signed into law by Abbott in June.

The FTC had signaled its concern with the TMB’s action in a September 2016 letter to the U.S. 5th Circuit Court of Appeals, which was handling the TMB-Teladoc dispute.

"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 in a 44-page memo.

In its latest letter, the FTC indicated it was spurred to investigate because of the makeup of the TMB, which was “controlled by market participants (e.g., doctors regulating doctors).”

READ MORE: Physicians Sour on States’ Telehealth Implementation Efforts

“[W]hen such boards exercise their authority in ways that are (1) beyond the scope of state policy and/or supervision; and (2) contrary to the public interest in competition, they are subject to federal antitrust law,” the letter stated. “In such instances, the commission will intervene to enforce the federal antitrust laws to protect competition.”

The FTC praised state officials for “directly exercising its sovereign authority to override the TMB’s rules and to reform its regulatory authority for the benefit of Texas consumers.”

“As the commission first noted in a 2004 report, when properly used, telemedicine has considerable promise to broaden access, lower costs and improve health quality,” the board concluded. “The commission hopes that by expanding the availability of telemedicine and telehealth alternatives, the new law will lead to many benefits for Texans, including increased competition among providers, more innovation in the delivery of care, increased access to healthcare services, reduced travel costs and greater convenience.”

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