Telemedicine company Teladoc is suing the Texas Medical Board over a new policy that restricts virtual visits in the state. The legal battle is one of the first that could turn on a recent U.S. Supreme Court ruling involving antitrust immunity of medical boards.
The rule at issue requires physicians to either meet with patients in person before treating them remotely or have other providers physically present with patients when treating them remotely for the first time. Teladoc, which uses technology to facilitate virtual patient-doctor visits, alleges the rule would restrict the company's ability to compete—and as a result raise prices and reduce access to physicians in the state.
A spokeswoman for the Texas Medical Board said Friday that she couldn't comment on the pending litigation. But the board has described the new rules as “representing the best balance of convenience and safety.” Teladoc, however, argues in its lawsuit that the state medical board began to take action to limit the company when it became a competitive threat.
Teladoc also argues that a recent U.S. Supreme Court decision makes it clear that the medical board is not immune from antitrust action. In North Carolina Board of Dental Examiners v. FTC, the court said that state licensing boards comprising active members of the profession, such as practicing doctors, are not immune from antitrust laws unless they are actively supervised by the state.
Twelve of the Texas board's 19 members are practicing doctors, and Teladoc alleges that neither the state of Texas nor the state's Legislature actively supervise the board.
Texas Medical Board spokeswoman Megan Goode, however, said the board is supervised by the state in that it “is subject to continuous oversight and review by the governor and Legislature.”
But Dr. William Sage, a professor at the University of Texas at Austin School of Law, said the Texas dispute “is exactly the sort of case that the North Carolina board decision was concerned about.” Sage said he doubts the Texas Medical Board would meet the Supreme Court's definition of being actively supervised.
Robert Fellmeth, a professor of public interest law at the University of San Diego School of Law, agrees. In fact, he doesn't believe any state medical board would clear the bar. Fellmeth, who is also director of the university's Center for Public Interest Law, said that allowing active market participants to make decisions about competitors presents “naked conflicts of interest.”
“They think they're doing what's right, but they're members of a tribe that profits from erecting barriers to entry,” he said.
Dan Goldfine, chair of antitrust practice at Snell & Wilmer in Phoenix, said it's possible the Texas Medical Board will clear the threshold laid out in North Carolina Board of Dental Examiners. He also downplayed the significance of that case, saying it merely affirmed existing law.
Fellmeth, however, called the North Carolina ruling one of the most important Supreme Court decisions in more than 70 years. More lawsuits, he said, will flow from it.
