Texas’ Future of Telemedicine

In another big win for telemedicine in general, and Teledoc specifically, the Texas Medical Board dropped its appeal to the 5th Circuit Court of Appeals, which requested the court review the District Court’s decision to not decline Teledoc’s antitrust suit. To fully understand the implications of this decision, a review of the suit that led up to this action is necessary. In 2011, the Texas Medical Board (TMB) sent a letter to Teledoc stating that the company was not in conformity with state administrative rule 22 TAC § 190.8 (I) which states that physicians are not to issue prescriptions for “any dangerous drug or controlled substance without first establishing a proper professional relationship.” TMB argued that Teledoc’s business model of consulting, diagnosing, treating patients completely over the phone did not meet the standard of a “proper professional relationship” as called for under the administrative rule. In response, Teledoc sued TMB in state court claiming that the rule was both invalid and inapplicable. However, the district court granted TMB’s motion for summary judgement. After an appeal by Teledoc, the Austin Court of Appeals rejected TMB’s interpretation of the statute, therefore siding with Teledoc. In response, TMB created an emergency rule defining a “proper professional relationship” as one that required face-to-face interactions. After injunctive relief was obtained by Teledoc, TMB went through the formal process of changing the rule to what was stated in the emergency rule. That rule was passed and was to go into effect in June of 2015.

In response to this, Teledoc sued TMB in federal court arguing that TMB’s new rule violated the Sherman Antitrust Act. In December of 2015, the trial judge declined to dismiss Teledoc’s antitrust suit, holding that Teledoc appropriately stated issues on which relief could be sought and that TMB was not immune to claims of violations of the Sherman Act because it was a State Actor. The judge reasoned that TMB did not come under the immunity afforded by the state action doctrine because the state was not actively supervising TMB’s conduct. At this point, TMB appealed to the Fifth Circuit in hopes of reversing the District Court’s decision garnering immunity from the action. TMB garnered support for their position in the form of joint amicus brief filed by the American Medical Association and the Texas Medical Association as well as a brief from the Federation of State Medical Boards. Not to be outdone, Teledoc got briefs from the Federal Trade Commission and the U.S. Department of Justice advocating for the Court’s lack of jurisdiction over appeal due to the improper avenues taken by TMB. Cite.

In a surprising move, TMB voluntarily dismissed its appeal in October of 2016. The TBM still believe the Teledoc’s business model violates the state’s administrative rules, but offered no reason for the dismissal. Not surprisingly, Teledoc did not dispute the dismissal. However, the chief legal officer for Teledoc, Adam Vandervoort​, expressed some concern about the seemingly arbitrary dismissal by the TMB stating that, “plaintiffs not that the Texas Medical Board stated at its most recent board meeting that withdrawing the appeal was ‘purely strategic’, which raises serious questions about the motivation behind the appeal and the justification for the decision to withdraw the appeal. Further, plaintiffs intend to see attorneys’ fees for responding to the appeal.” There has been no word from either side about the possibility of a settlement.

Kellie Bruney is a second year law student at DePaul University College of Law. After graduating with a bachelors of science in psychology from Dominican University in 2012, Kellie worked for the University of Chicago as a research assistant in Geriatrics and Palliative medicine studying medical decision making. ​​