The Battle Against Protectionism in the Utilization of Telemedicine
June 1, 2016
By Robert B. Vogel, MD, JD, Retinal Ophthalmologist at Piedmont Eye Center, Lynchburg, VA; Attorney, Overbey Hawkins & Wright, PLLC, Lynchburg, VA; Adjunct Professor, Humanities and Bioethics, Liberty University School of Medicine, Lynchburg, VA
Dr. Vogel reports no financial relationships relevant to this field of study.
During early space travel, many remember watching NASA astronauts receive physician care from Earth via a grainy video link. From this pioneering use, telemedicine has been adapted for the diagnosis and treatment of patients in various innovative commercial settings. In fact, in 2011, approximately 11 million people were treated by telemedicine — a number that has grown rapidly over the past five years.1 Telemedicine is in a remarkable growth phase, with its use expanding so quickly that the bureaucracy of medicine has failed to keep up with the technology. Legal and regulatory barriers, such as physician licensure requirements, reimbursement issues, and even attempts to block entry into the market completely, have placed medicine behind other industries in accepting technology that is beneficial to its consumers.2 A recent ongoing court battle is emblematic of the impediments that may exist in a state regulatory regime regarding telemedicine.
Telemedicine is characterized by the geographic separation between two or more people engaged in the practice of medicine using telecommunication technology to gather, store, and disseminate clinically related information. The technology is then used to assess, diagnose, and treat medical conditions.3 The telemedicine market is currently categorized into three models: the provider-to-provider model, in which two clinicians discuss a specific patient; the provider-to-patient model, in which a provider connects directly with a patient either by telephone or online; and the so-called mHealth model, which provides telemedicine services to a patient via a smartphone application.4
The rise of the importance of telemedicine has much to do with the failures of the U.S. medical care system. These include a lack of access to medical care in underserved geographical areas, lack of information sharing between physicians and patients, and the high cost of care.5 Telemedicine allows technology to access patients, wherever they are, via cost-effective methods with documented quality outcomes.6
Current Uses of Telemedicine in Emergency Medicine
Telemedicine applications are used in many hospitals and health systems across the United States to support emergency medical care. For example, physicians at the University of Mississippi Medical Center have used telemedicine for emergency consults with outlying hospitals since 2003. Using online video and other technology, emergency medicine physicians, and now physicians from 30 other specialties, provide advice to rural hospitals and other clinical sites.7
George Washington University Department of Emergency Medicine offers emergency consult services to the maritime industry and to local nursing homes that are considering transport to their hospital.8 Additionally, this facility recently commenced a fellowship training program in telemedicine.9
At Avera Health Care System in Sioux Falls, SD, emergency medicine physicians discuss cases with previously trained nursing staff through video, audio, and software links. They are available to consult on complex emergency cases and provide immediate medical direction.10
ACEP Adopts Telemedicine Policy
In January, the American College of Emergency Physicians (ACEP) adopted its own telemedicine policy due to the increase in the use of telemedicine, in both volume and scope, by emergency care physicians in the United States.11 Because there are wide variations between state regulatory regimes concerning critical issues such as access to patients, medical licensure, and payment for services, ACEP thought it necessary to publish its own policies regarding the ongoing controversies.
Additionally, the use of telemedicine in emergency medicine, as compared to other specialties, can present the clinician with a unique set of circumstances. For example, emergency medicine’s focus on unscheduled care may make it difficult to first establish a physician-patient relationship or conduct a face-to-face interview. The ACEP policy highlights these and other unique features of emergency care.
The importance of recognizing differences between emergency medicine and other specialties becomes evident when examining the policy statements of other stakeholders. For example, the Federation of State Medical Boards (FSMB) model guidelines assert that physicians first must establish a physician-patient relationship before utilizing telemedicine without qualifying that this may not be possible in the setting of an emergency — a concept acknowledged in the ACEP guidelines.12 In addition, protocols advocated by the American Medical Association support the use of face-to-face telemedicine consults exclusively, which could be a challenging and limiting provision in some emergency settings.13
The ACEP Policy
Credentialing and Licensing: ACEP calls for the development of interstate medical licenses that would be offered based on reciprocity among states. This would evolve into uniform rules for physicians and the practice of medicine. ACEP believes that as it currently stands, all telemedicine providers should meet local credentialing and other qualification criteria as mandated by state and federal law.
Establishing a Physician-Patient Relationship: ACEP outlines the traditional establishment of a physician-patient relationship, formed by mutual agreement to collaborate on the patient’s healthcare. It also includes specific informed consent that must be given to the patient in the setting of a telemedicine conference. This would include: the nature of the telemedicine conference, limits of confidentiality in electronic communication, the potential for technical failure, prescribing policies given state and federal guidelines, and the conditions under which telemedicine services may be terminated and a referral made for in-person care. ACEP recognizes that when telemedicine is used for urgent care, such as a stroke or cardiac issue, that this information might be provided in an abbreviated form because of the need to provide timely care.
Billing and Fair Compensation: ACEP advocates for appropriate billing and payment for telemedicine services. Only 22 states and the District of Columbia mandate coverage for telemedicine-provided services under private health insurance plans. There are 46 states that currently reimburse for telemedicine services under the Medicaid program. The Medicare program currently has only limited reimbursement for telemedicine-provided services. However, new legislation has been introduced that would allow for the expansion of the payment regime under Medicare. The CONNECT for Health Act modifies the current restrictions and allows for alterative payment models. There is nothing in CONNECT that directly addresses emergency medicine. CONNECT is currently under assessment in the Senate and has garnered wide support from stakeholder organizations.14
Internet Prescribing: ACEP supports internet medication prescribing given that a physician-patient relationship exists, an appropriate evaluation is performed, and a treatment plan is outlined. ACEP does not support the prescribing of medications without real-time interactive engagement between physicians and patients.
Professional Liability: This is not directly addressed in the ACEP document, although there is emphasis on the fact that the physical location of the patient defines that practice locale and, therefore, which state law applies.
As states grapple with their regulatory regimes, they may choose to incorporate the criteria called for by the various stakeholders as they promote their unique and overlapping interests. A recent court case, Teladoc v. Texas Medical Board, exemplifies the type of conflicts that may arise when the burgeoning use of telemedicine bumps up against state regulatory policy. In this case, the Texas Medical Board claims to be looking out for the best interests of the consumers of medical services, while Teladoc, the telemedicine provider, claims the board is limiting access to patients to protect local providers from competition.
The Case: Teladoc v. Texas Medical Board
Teladoc is a telemedicine provider that uses the provider-to-patient model, utilizing phone and online video consultations. They are currently the number one provider of telemedicine services in the United States assessed by market share.15 Teladoc services are available to patients either through their employer or through a personal account. The registrant uploads his or her medical history, medical records, and contact information of her personal physician. Members of Teladoc then may place a consultation request for a board-certified physician who is licensed in the state in which the patient resides and who is trained to provide diagnosis and treatment via telephone or video. The average call back time is 16 minutes after request. Based on a review of the medical records and a telephone conversation, a physician provides medical advice that can consist of prescribing medication (but no narcotics or “lifestyle drugs” such as Viagra or diet pills) or referral to a local physician or ED. The Teladoc physician’s notes are then added to the patient’s chart. There is an annual fee of $150, and the cost for a Teladoc consultation is approximately $40.
The Texas Medical Board (TMB) is typical of state medical boards in that it consists of physicians and members of the public appointed by the governor. The board’s business includes interviewing licensure candidates, considering disciplinary matters, and adopting substantive and procedural rules affecting the practice of medicine in Texas. A majority of the board consists of so-called “active market participants” in that they are practicing the discipline that they oversee.16
What Started the Controversy?
In 2011, the TMB sent Teladoc a letter warning that its telemedicine model violated a TMB rule by claiming its physicians could use telephone consultations alone to prescribe medication for patients. Teladoc sought legal recourse by bringing suit against the TMB in Texas State Court. Teladoc won a restraining order against the TMB, allowing it to continue providing its services in Texas.17 In response, the TMB issued a rule in April 2015 amending the Texas telemedicine rule to mandate a face-to-face visit before a physician could issue a prescription.18 This effectively would have prevented Teladoc from operating in the state because the company mainly provided telephone consultations.
Soon thereafter, Teladoc filed an action asking the United States District Court for the Western District of Texas to enjoin the TMB from asserting the new rule. The claim was based on antitrust law. Teladoc maintained that the effect of the new rule would be anti-competitive and lead to an increase in prices, fewer choices, less access, innovation stagnation, and a decline in overall supply of physician services. TMB countered that mandated face-to-face interaction would lead to improved quality of medical care in Texas. The court sided with Teladoc and issued a temporary restraining order, preventing institution of the new rule.19
The TMB countered with a motion to dismiss based on a claim that they were protected from these antitrust considerations by the so-called “state action immunity doctrine.” This doctrine, first asserted by the Supreme Court in Parker v. Brown, maintains that if a state policy is both clearly articulated and actively supervised, then the state entity involved will be immune from anticompetitive related antitrust laws with respect to that policy.20-22
The parties disagreed about whether there was active state supervision of the TMB and whether it would qualify for state action immunity under Parker and its progeny cases.
The Texas Federal Court decided the motion to dismiss in favor of Teladoc on Dec. 14, 2015.23 The Texas court based its decision about active supervision under the state action immunity doctrine on the recent Supreme Court decision in North Carolina State Board of Dental Examiners v. Federal Trade Commission.24 The North Carolina Board of Dentistry consists of practicing dentists and dental hygienists. In 2003, non-dentists began offering teeth-whitening services to consumers in mall kiosks and salons across the state. After dentists complained, the board sent cease and desist letters to non-dentist teeth-whiteners, who subsequently complied with the board’s demand. However, the Federal Trade Commission (FTC) subsequently charged the board with violating the Federal Trade Act by excluding non-dentists. The Supreme Court agreed with the FTC ruling, stating that when market participants operate a state agency, the agency is a private actor and subject to federal antitrust laws.
The Supreme Court made clear that a board consisting of active market participants enjoys Parker immunity only if it was subject to active state supervision. The Court said active supervision need not entail day-to-day involvement in an agency’s operations, but rather the state’s review mechanisms had to provide realistic assurance that the board’s anticompetitive conduct promoted state policy, rather than merely the board members’ individual interests.25
The Texas Federal Court held that the TMB was not subject to active supervision, as defined by the Supreme Court in the North Carolina Dental Board case, and therefore was subject to antitrust scrutiny. The case remains subject to the preliminary injunction won by Teladoc in April 2015 and will go to trial unless settled beforehand.
What Does the Teladoc Decision Mean?
The win for Teladoc at this stage of the case means the court believes there is merit to their argument, but it does not mean that they will ultimately prevail. If Teladoc wins, it will send a clear message to other state medical boards that protectionism will not prevail against the utilization of telemedicine.
There are many legal and regulatory hurdles that must be cleared before telemedicine is widely accepted and utilized. Emergency medicine physicians would be wise to keep abreast of the regulatory environment in their own state and at the federal level.
- Barrett C, Gilroy AS. What Is ... Telemedicine? Chicago: ABA Publishing; 2015.
- Id. at xiv.
- Id. at 7-8. (From, Klein SR, Kim J. Telemedicine and mobile health innovations amid increasing regulatory oversight. 22 Westlaw J Health Law 3, 5. June 24, 2014.
- Id. at 20-26.
- Rice T. Market failure in health care: Still common after all these years. The World Bank website. Available at: . Accessed April 25, 2016.
- American Telemedicine Association. Research outcomes: Telemedicine’s impact on healthcare cost and quality. Available at: . Accessed April 25, 2016.
- The University of Mississippi Medical Center, Center for Telehealth. Available at: . Accessed April 25, 2016.
- The George Washington University School of Medicine & Health Sciences, Department of Emergency Medicine. Available at: . Accessed April 25, 2016.
- The George Washington University School of Medicine & Health Sciences, Department of Emergency Medicine. Fellowship programs - telemedicine. Available at: . Accessed April 25, 2016.
- Avera eCare. eEmergency. Available at: . Accessed April 25, 2016.
- American College of Emergency Physicians. Emergency medicine telemedicine policy. Available at: . Accessed April 25, 2016.
- Federation of State Medical Boards. Model policy for the appropriate use of telemedicine technologies in the practice of medicine. Available at: . Accessed April 25, 2016.
- American Medical Association. Coverage of and payment for telemedicine. Available at: . Accessed April 25, 2016.
- The 114th Congress. S.2484 - CONNECT for Health Act. Available at: . Accessed April 25, 2016.
- Supra note 1, p.30.
- Texas Medical Board. Texas Medical Board overview. Available at: . Accessed April 25, 2016.
- Teladoc, Inc. v. Texas Medical Board, 453 S.W.3d 606, 620 (Tex. App.–Austin 2014, pet. filed).
- 22 Tex. Admin. Code § 190.8(1)(L).
- Teladoc, Inc. v. Texas Medical Board, No. 1-15-CV-343-RP (W.D. Tex. May 29, 2015) (order granting preliminary injunction).
- 317 U.S. 307 (1942).
- FTC v. Phoebe Putney Health Sys., Inc., 133 S.Ct. 1003, 1010, 2013 (quoting California Retail Liquor Dealers Assn. v. Midcal Alum., Inc., 445 U.S. 97, 105, 1980).
- Ticor Title Ins. Co., 504 U.S. 621, 632, 1992 (citing Parker v. Brown, 317 U.S. 307, 350-51, 1942).
- Teladoc, Inc. v. Texas Medical Board, No. 1-15-CV-343 (W.D. Tex. Dec. 14, 2015).
- 135 S. Ct. 1101 (2015).
- Id. at 1110.
Telemedicine allows technology to access patients, wherever they are, via cost-effective methods with documented quality outcomes.
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