Teladoc Case Could Have Nationwide Effect, Lawyers Say

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By Matthew Loughran

Jan. 15 — A recently appealed antitrust case challenging a rule by the Texas Medical Board could have a wide-ranging effect on the growth of telemedicine nationwide, according to participants in a Jan. 15 webinar sponsored by the American Bar Association's Health Law Section.

The case, brought by telemedicine provider Teladoc Inc., alleges that a rule promulgated by the Texas Medical Board that requires an in-person physical examination by a physician regardless of medical need violates the federal antitrust laws.

“It's such a clean case of such a clear majority of the active members of the licensed profession adopting a restriction to try to prevent competition from a new and innovative category of competitor,” said Leah Brannon of Cleary Gottlieb in Washington, a webinar participant who also represents Teladoc in the case.

The medical board recently lost a motion to dismiss the case based on “state action immunity” from the antitrust laws (Teladoc Inc. v. Texas Med. Bd., 2015 BL 408940, W.D. Tex., No. 1:15-cv-343, 12/14/15) (241 HCDR, 12/16/15).

In its decision, the district court found that the board wasn't subject to active supervision by the state and thus wasn't a state action exempted from the federal antitrust laws.

That decision has been appealed to the U.S. Court of Appeals for the Fifth Circuit (Teladoc Inc. v. Texas Med. Bd., 5th Cir., No. 16-50017, appeal docketed 1/8/16).

Timing of Case

The webinar participants agreed that the importance of the case is greatly increased by the fact that it has been brought now.

“The case comes at a time of where there is a very, very robust national dialogue about telemedicine,” said Jonathan Brouk of DeBruhl Haynes, The Health Law Group in New Orleans, who was a participant in the webinar.

As evidence of the growing attention paid to the field, he pointed to “more than 200 new telehealth bills” that were introduced by various state legislatures in 2015 alone.

He also pointed out that presidential candidates have recently mentioned telemedicine as a way to reduce costs. “In just about every health-care conversation that we are hearing now about the ways to reduce the cost of care, telemedicine is one of the primary modalities for doing that,” Brouk said.

Brouk also pointed to recent cases involving telemedicine providers in other jurisdictions as evidence that the courts have begun to grapple with the limits of remote access for medical care.

Brannon blamed the medical board's action in the Teladoc case on the substantially reduced costs of a Teladoc consultation compared with an in-person office visit.

She also noted that at least 13 percent of patients said they wouldn't seek any care at all when asked by Teladoc what they would do if they couldn't have access to telemedicine services.

To contact the reporter on this story: Matthew Loughran in Washington at mloughran@bna.com

To contact the editor responsible for this story: Brent Bierman at bbierman@bna.com