A Capehart Scatchard Blog

Tell A Doctor About Telehealth

By on November 2, 2015 in Telehealth with 0 Comments

Teladoc, Inc., utilizes telecommunication technology to connect physicians and patients 24 hours per day, 365 days per year for a fraction of the cost of a physician’s office, urgent care center, or hospital emergency room. Telehealth services have taken off in recent years and, as a result, Teladoc reached its one millionth “visit” this October. The Texas Medical Board nearly halted its state’s telehealth industry in April of 2015, when it voted to adopt Rule 190.8, prohibiting prescription of any “dangerous drug or controlled substance” without first establishing a “defined physician-patient relationship” which “must include,” in pertinent part, “documenting and performing” a “physical examination that must be performed by either a face-to-face visit or in-person evaluation.”

Teladoc and several of its doctors sought to prevent the enforcement of Rule 190.8, which was set to go into effect on June 3, 2015, by seeking a temporary restraining order and preliminary injunction in the United States District Court for the Western District of Texas. The Medical Board argued the Rule protects against sub-standard physician care, which can occur when a diagnosis is rendered over the phone rather than during a physical examination. Teladoc countered this argument by citing the benefits of Teladoc’s immediate treatment, the Rule’s likely negative effects on market competition, and the imminent destruction of Teladoc’s business model under the Rule.

Throughout the opinion, the Court reiterates the fact that the Board merely submits anecdotal evidence to support its contentions. The Court found the Board’s objectives underlying the Rule to be suspect in light of the existing restrictions on poor quality of care and the industry’s acceptance of “on call” coverage by one physician for another’s patients. The Court held that the Rule would cause irreparable harm by destroying a business model and further held that the anti-competitive effect of the Rule did not justify its purpose.

This is an interim victory for Teladoc, as the declaratory judgment holding the Rule to be invalid is still pending. Additionally, the Court stressed that its opinion was strictly limited to the facts of the instant case. Telehealth companies should be cautiously optimistic about the Court’s decision and carefully review the same.


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