FTC and DOJ File Amicus Brief in Teladoc Case

In the latest legal development in the fast-growing telemedicine field, two federal agencies have filed a joint amicus brief urging a federal appeals court not to block a legal challenge to restrictions a Texas doctors’ board wants to impose on telemedicine programs.

In their brief—filed last month with the 5th U.S. Circuit of Court of Appeals in New Orleans–the Department of Justice and the Federal Trade Commission said telemedicine provider Teladoc Inc.’s 2015 suit against Texas Medical Board rules imposing significant restrictions on the use of telemedicine should be allowed to proceed.

The agencies are particularly interested in the proper application of the “state action doctrine,” which allows for sovereign states to “displace competition with regulation or monopoly public service” that would otherwise be barred under antitrust laws. The agencies’ concern is that “[o]verly broad application of the state action doctrine…sacrifices the important benefits that antitrust laws provide consumers and undermines the national policy favoring robust competition.”

The brief follows earlier high-level government support of telemedicine programs. “As a policymaker, I believe we also need to be far seeing and far reaching in our policies to allow the potential of telemedicine to become a reality for patients in the U.S.,” FTC Commissioner Maureen Ohlhausen said in an address before The Connecticut Bar Association.

As an FTC commissioner, “There are policies that I can encourage my agency to pursue to help facilitate the successful proliferation of telemedicine,” Ms. Ohlhausen added. Bolstering Ms. Ohlhausen’s point, a footnote in the FTC brief confirms that FTC staff are currently “investigating the underlying actions that are the subject of this appeal and also issued guidance regarding the application of the state action doctrine to state regulatory boards controlled by market participants.”

And employer groups, in their amicus briefs filed with the appeals court in the Teladoc case, have detailed the advantages of telemedicine programs.

“Telemedicine dramatically lowers the soft costs of obtaining health care, such as the time waiting for an appointment, the physical and mental stress of traveling with children or elderly relatives or those with infectious conditions to a doctor’s office, the time spent traveling to and waiting for the doctor, and the costs of travel,” according to an amicus brief filed by The ERISA Industry Committee in the Teladoc suit.

The legal briefs follow a decision late last year by U.S. District Court Judge Robert Pitman rejecting the Texas Medical Board’s request to toss out Teladoc’s suit challenging the medical board’s telemedicine rules.

At issue in the litigation are board rules mandating, among other things, that a physician has to meet with a patient in person before the physician can issue a prescription, regardless if such contact or physical examination is medically necessary.

Such a requirement files in the face of telemedicine programs in which patients contact physicians’ online or by dialing toll-free numbers.

Telemedicine providers and others say such programs are an important tool in helping to down health care costs, as well as saving time for patients and their families.

“In a lot of Texas rural coummities, many people may lack access to medical services. Telemedicine programs increases the ways they can obtain services,” said Lisa Schmitz Mazur, a partner with McDermott, Will & Emery L.L.P. in Chicago.

In addition, Ms. Mazur said, with a growing number of employees responsible for the care of other family members, telemedicine can save considerable time for those employees when family members develop a medical problem.

The programs can generate cost savings for both employers and employees, notes Dr. Allan Khoury, a senior health management consultant with Willis Towers Watson P.L.C. in Cleveland. Employees tapping the programs typically face—due to plan design—lower copayments, while employers save money due to the lower cost of services provided through telemedicine compared to services delivered through hospital emergency rooms, Dr. Khoury said.

It isn’t known when the appeals court will rule in the Teladoc case.