Court Bars Newly Adopted Texas Telemedicine Rules From Being Implemented

On April 10, 2015, the Texas Medical Board agreed to adopt revisions to Texas Administrative Code § 190.8(1)(L) that would dramatically restrict competition from telemedicine.  The new rule was supposed to become effective as of today, but on Friday, Federal Court Judge Robert Pittman ruled the new law was "suspect" and issued a preliminary injunction against implementation.

The new rule, which contains limits on the ability of a physician to prescribe drugs without an in-person examination of the patient, now requires a "defined physician patient" relationship that must include a physical examination performed by the physician "face to face."  The rules do allow for some exceptions that would permit a physician to diagnose or prescribe medications via phone or video, such as when the patient is at a medical clinic, or where another health care worker is present with the patient and can do some type of exam.

Dallas based Teladoc, which was the target of the new rule, filed suit on April 29, 2015 in the United States District Court for the Western District of Texas (Austin) challenging the new rule on anti-trust grounds.  At the time suit was filed, Teladoc sought a temporary restraining order to block enforcement of the rules pending a trial on the merits.

Teladoc offers a network of telemedicine providers who consult with patients by phone or video.  Teladoc operates in 48 states and is the largest telemedicine provider in the United States.  It argued that many rural areas that do not have doctors will be harmed by the newly adopted rule, and that it was anti-competitive to their business model.  In fact, Texas has dozens of counties that are considered to be "medically underserved" and many have only one primary care doctor. In Texas, Teladoc's services are offered to 2 million employees through various employer sponsored health plans.

On May 22, the Court held a hearing on the application for temporary restraining order and preliminary injunction.  Amicus briefs were filed by the American Osteopathic Association, Texas Osteopathic Medical Association, Southwest Pharmacy Solutions, Inc., and the Texas Medical Association.

On May 29, Judge Pittman issued a preliminary injunction from Rule 190.8 taking effect, and the TMB was enjoined from taking any action to implement, enact and enforce new Rule 190.8 pending final resolution of the claims asserted in the lawsuit.  The 20 page detailed opinion issued by Judge Pittman concluded that Teladoc had shown a likelihood of success on their antitrust claim.