Ongoing litigation between telemedicine pioneer Teladoc and Texas physicians could have a significant impact on the definition of remote consultations and the powers of medical boards nationwide.
At issue is a decision made by the Texas Medical Board earlier this year that would require physicians to conduct an in-person physical examination of a patient before any type of diagnosis or prescribing of drugs via telemedicine would be allowed. The rule is to take effect June 3, 2015 unless Teladoc is successful in getting the courts to agree with its lawsuit, which contends the board's action is anticompetitive and unlawful by antitrust standards.
Teladoc maintains this rule will put them out of business in Texas, which is big considering Texas operations accounted for approximately $10 million, or 23 percent, of the company's revenue in 2014. Teladoc is also poised to go public and it's uncertain how big an impact this could have on its IPO.
If Teladoc is not successful in its suit, which was filed April 29, 2015, in the U.S. District Court, Western District of Texas, then other state medical boards may feel emboldened to take similar measures to stifle telemedicine services, which by definition offer patients access to qualified, licensed physicians through telecommunications technologies. Telehealth providers are generally available 24 hours a day, 365 days a year for a fraction of the cost of a visit to a physician's office, urgent care or a hospital emergency room.
By instituting its new rule, the Texas Medical Board could make it very hard on some residents to receive preventive medical care, particularly those who live in rural sections and who don?t have a primary care physician. As the number of primary care doctors decreases the importance of, and reliance on, telemedicine only grows. The board's new rule goes against a service that is annually becoming more popular and widely accepted, especially as people become more dependent on email, texting, cell phones and other telecommunication devices.
Teladoc's membership increased by 73 percent from 2008 to 2010; its number of consultations jumped 163 percent from 2013 to 2014. A Teladoc consultation costs $40 where the average cost of a physician's office is $145. The company provides services for more than 300 small businesses in Texas, and these businesses will incur substantial healthcare costs if the rule goes through.
But Teladoc has reason to be hopeful. The U.S. Supreme Court said earlier this year that the North Carolina Dental Board was violating antitrust laws when it tried to stop non-dentists from offering teeth whitening services. In this case, the board was not exonerated from antitrust laws because it was not actively monitored by the state.
Indeed, of the 14 members of the Texas Medical Board who voted in favor of the new rule, 12 are active physicians. The lone dissenter is a non-physician. Of the 203 comment letters received during the rulemaking proceeding, only three spoke out against telemedicine, and two of those were filed by a trade association of physicians.
Several interested parties in the medical community will be watching closely to see what happens with Teladoc's lawsuit. Its outcome could very well determine the vitality of the telemedicine industry.