Texas and its state medical board on Monday withdrew their appeal that questioned whether Teladoc could challenge the state's controversial telemedicine restrictions.
The Texas Medical Board said its board on Friday voted to withdraw the appeal before the U.S. Court of Appeals for the 5th Circuit. The board had vehemently opposed Teladoc's suit that alleges the state's telemedicine rules violate federal antitrust laws, launching an unusual appeal after a lower court refused to dismiss Teladoc's case.
The board's proposed rule requires physicians to meet with patients in person before they can treat them remotely, or another provider must be physically present during the first telemedicine appointment to establish a doctor-patient relationship. Lewisville, Texas-based Teladoc maintains that the board violated the law because federal antitrust laws require the board to be supervised by the state in order to create the rules, which the company maintains will affect access to care. According to the board, the restrictions are to ensure quality of care.
But the U.S. Justice Department and the Federal Trade Commission recently took Teladoc's side in the dispute, telling the 5th Circuit the state rules were anticompetitive and lacked appropriate review. The federal agencies encouraged the appeals court to reject the medical board's appeal and maintained the underlying rule should be eliminated.
Teladoc's chief legal officer, Adam Vandervoort, said the Texas Medical Board's outgoing executive director called the decision to withdraw "purely strategic." “The Texas Medical Board evidently withdrew its appeal because it didn't want to suffer a ninth loss to Teladoc in the courts," he said.
"That raises troubling questions about the (board's) motives or its competence in both filing, and subsequently retracting, the appeal," he added. "Teladoc and its amicus parties expended substantial resources on defending the appeal, all of which may have been wasted.”
Although this appeal is over, the medical board said it will continue to fight Teladoc's challenge in court and claimed it is immune from federal regulation. The case will continue to be litigated in U.S. District Court in Austin, Texas. While most appeals are sparked by the end of a lawsuit, Texas and the medical board took a rare legal step when they asked the 5th Circuit to weigh in on a federal judge's rejection of its motion to dismiss Teladoc's case. Such appeals are seldom granted.
“The regulation of medicine is a right reserved for the states, and the board stands behind and will seek future vindication of its state-action immunity for performing the duties assigned it by the Texas Legislature,” said Scott Freshour, interim executive director of the Texas Medical Board.
Texas is experiencing a severe physician shortage, with 35 counties lacking a single practicing physician within their boundaries. Teladoc has said in court filings that telemedicine can help bridge this gap, as it's often cheaper than traditional doctor or emergency room visits.