IS TEXAS MEDICAL BOARD BEATING STRATEGIC RETREAT ON TELEMEDICINE CHALLENGE?

 

More than 180 years ago, Sam Houston, then commander-in-chief of the army of Texas, employed a strategic retreat to regroup after the fall of the Alamo to the Mexican army. His tactic resulted in victory at the Battle of San Jacinto and saved the effort for Texan independence.

On Oct. 14, the Texas Medical Board appeared to engage in the same strategy in an effort to save its rules on telemedicine. The board voluntarily dismissed its appeal in the U.S. Court of Appeals for the Fifth Circuit challenging a court order that refused to acknowledge the board’s claim for immunity from the federal antitrust laws.

The case involves rules issued by the board requiring an in-person consultation before a physician can prescribe certain drugs. Teladoc Inc., one of the nation’s largest telemedicine providers, sued in federal court, saying the board’s rules were an attempt by the physicians on the board to eliminate competition from telemedicine providers in violation of the Sherman Act and the Commerce Clause of the U.S. Constitution.

The board claimed that it was immune from the antitrust laws because it was a Texas agency and sought to dismiss the case. The judge disagreed, saying the board wasn’t sufficiently supervised by the state to qualify for state action immunity. The board immediately appealed the order and the trial court put the case on hold while the Fifth Circuit considered the appeal.

A large number of interested parties—including the Federal Trade Commission and the Department of Justice’s Antitrust Division—filed friend of the court briefs questioning whether the board had used the proper procedural method of bringing the appeal. Alternatively, the parties urged the appeals court to find that the trial court was right in ruling that the board hadn’t shown it was immune as a matter of law.

The board then dropped its appeal, which now restarts the case in the trial court. In explaining why the board decided to drop the appeal, the board’s interim executive director indicated that it was a strategic retreat. He said the board intended to defend not only the legitimacy of its telemedicine rules, but also the application of state action immunity to its decisions. It will be interesting if the strategy works and the board is able to regroup and defend its rules.

Read my full story about the development at http://src.bna.com/jvw.

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