Texas Case Highlights Tensions Over Telemedicine

A federal judge has determined claims made by the Texas Medical Board in adopting new telemedicine rules were “suspect” and barred the rules from taking effect until a civil trial can be held.

The ruling by U.S. District Judge Robert Pitman hinges largely on a revised rule the board adopted in April that requires a patient to have a “face-to-face visit or in-person evaluation” before a prescription can be dispensed. The board has argued such a measure is crucial to ensuring patient safety and quality care.

But Dallas-based Teladoc, which challenged the board’s action, argued the panel violated antitrust laws because the rule significantly impairs its business model.

Teladoc, a leading telemedicine provider, offers a network in Texas in which a patient consults by phone with a physician and then can upload over the Internet or by mobile app images or other medical data, Teladoc spokeswoman Meredith Adams said. The new revisions would damage this service by first requiring a face-to-face examination, Adams said.

Lawyers for the board had argued during a May hearing that Teladoc was being speculative when it argued the new rules would lead to increased prices for patients, fewer choices and other drawbacks.

“The court disagrees,” Pitman said in his ruling. “Plaintiffs’ evidence shows the average costs of visits to a physician or emergency room are $145 and $1,957, respectively, and the cost for a Teladoc consultation is typically $40.”

The agency isn’t commenting on the ruling. In a statement last month, board president Dr. Michael Arambula said the board wants to avoid any sort of initial treatment done by telephone that doesn’t provide “any objective diagnostic data” to help a doctor serve a patient.

“The board recognizes that as technology evolves, so too must regulations governing telemedicine,” Arambula said.

Teladoc CEO Jason Gorevic said telehealth is important in Texas, where many rural regions have few doctors and it can be difficult for patients to travel long distances to medical centers.

Teladoc operates in 48 states and hasn’t encountered the legal tussles that have transpired in Texas, Gorevic said. “We have not ended up in court in any other state,” he said. “This represents the sixth time that the courts have found in our favor in Texas.”

Lawyers for the board said in May that it’s critical for a patient to have an established relationship with a physician, arguing that treatment notes are more likely to become part of the patient’s “permanent medical record” than if they were provided by a Teladoc consulting physician.

But Pitman said in reality patients do not have a single medical record, and instead have records scattered across a variety of providers.