The U.S. Justice Department and the Federal Trade Commission have backed Teladoc's challenge of the Texas Medical Board's telemedicine restrictions, saying the rules are anticompetitive and weren't appropriately reviewed.
The Justice Department and FTC told the U.S. Court of Appeals for the 5th Circuit to ignore the medical board's appeal of Teladoc's case that prevents the board from implementing a rule that curbs telemedicine practices in the state, saying the court doesn't have the authority to review the decision and the rule itself should be thrown out.
In 2015, the Texas Medical Board passed a rule requiring physicians to meet with a patient in person before treating them remotely, or they would need to have another provider physically present for telemedicine visits. But federal regulators said in their amicus brief Friday that the rule wasn't appropriately reviewed and the board could be biased, echoing Teladoc's arguments against the rule, which they say threatens its business model.
Federal support of Teladoc is yet another negative sign for the Texas Medical Board. A federal judge already granted a preliminary injunction halting the telemedicine rules while Teladoc's case moves forward, showing he believes the Lewisville, Texas-based company will likely prevail in its quest to permanently dispel the state regulation.
“The TMB did not carry its burden to show active supervision,” the Justice Department and FTC said. “There is no evidence that any disinterested state official reviewed the TMB rules at issue to determine whether they promote state regulatory policy rather than TMB doctors' private interests in excluding telehealth—and its lower prices—from the Texas market.”
Although the medical board, which is made up mostly of doctors in the state, maintained that the rule protects the quality of healthcare in the state and covers more than just telemedicine, the Justice Department and the FTC said the rule could be anticompetitive.
Teladoc initially sued the state board in April 2015, alleging the board needed state supervision in order to pass the controversial rules. In December, U.S. District Judge Robert Pitman refused to dismiss the suit and rejected the board's claims that it was exempt from the state supervision requirement. Federal regulators are supporting that decision.
“The purpose of the active supervision requirement is to ensure that an anticompetitive decision promotes state policy, not private interests,” the Justice Department and FTC said in their amicus brief.
But the 5th Circuit doesn't need to rule on this issue, Teladoc and the regulators say, since the underlying case is still going on. Appeals courts rarely take on cases before they have been fully adjudicated in the lower court, and the Justice Department and the FTC said the medical board's appeal shouldn't fall in that narrow category.