A few months ago, two states that previously imposed onerous telemedicine requirements – Texas and Oklahoma – enacted laws that loosen restrictions on telemedicine providers and generally fall into line with what a vast majority of states already permit. However, these laws continue a pattern in which each state’s telemedicine laws use different definitions for what constitutes telemedicine and imposes disparate restrictions on telemedicine providers. This lack of uniformity imposes an ongoing challenge for telemedicine providers.

The Texas law, passed by the state legislature on May 12, 2017, permits telemedicine providers to establish a valid patient-provider relationship via telemedicine and without the need a prior in-person visit. This law follows a long and arduous court battle between the Texas Medical Board and Teladoc Inc. A summary of the case can be found here. At the crux of the controversy were Board regulations that prohibited physicians from establishing a valid physician-patient relationship in the absence of an in-person visit.  Continue Reading Holdout States Loosen Restrictions on Telemedicine but Obstacles Remain

On June 17, the Texas Medical Board (“Board”) filed a brief with the Fifth Circuit Court of Appeals reiterating that the Board’s rulemaking processes are protected under the state action immunity doctrine, noting that the case could significantly impair state agencies in carrying out their governmental functions. The Board’s brief is the most recent action in the Teldoc case that has dragged on for almost two years and left little certainty for those who provide telemedicine services in the State.

As we previously reported, it all began when the Texas Medical Board issued an emergency proposed rule clarifying that physicians must perform a face-to-face or in-person physical examination of a patient prior to issuing a prescription or risk sanctions for unprofessional conduct. Teladoc, whose business model is based on providing health care services via telephone and without a face-to-face or in-person physical examination, sued the Texas Medical Board, alleging that the proposed rule violated antitrust laws. Late last year, a federal district court denied the Texas Medical Board’s motion to dismiss, finding that the Board is not entitled to state action immunity because its actions are not actively supervised by the state. Continue Reading Texas Medical Board Seeks State Action Immunity Protection in Fifth Circuit Brief

Late last week, Texas telemedicine practitioners received a temporary reprieve from a new regulation issued by the Texas Medical Board (the “Board”) when a Texas federal court prohibited implementation of the new rule that would have prevented prescribing via telemedicine.  The regulation’s suspension stems from an antitrust claim brought by a national telehealth provider, Teladoc, Inc. (“Teladoc”), and other plaintiffs against the Board alleging that the Board’s new regulation violates Section 1 of the Sherman Act and the Commerce Clause.

The injunction is the latest blow in a lengthy battle in Texas regarding the standards for appropriate telemedicine practice and is one of the first major cases challenging the actions of a state medical board in the wake of the Supreme Court’s decision in North Carolina State Board of Dental Examiners v. Federal Trade Commission, No. 13-354, slip op. (U.S. Feb. 25, 2015).  In that case, the Supreme Court held that the antitrust laws would apply to – and the state action exemption would not protect – activities of state agencies or boards made up of market participants, absent active state supervision of the Board’s challenged conduct. (Further discussion of the case is available in the Mintz Levin Antitrust Alert, Feb. 26, 2015, No Active State Supervision, No Antitrust Immunity for North Carolina State Dental Board”.)

Although the Board is a state agency “statutorily empowered to regulate the practice of medicine in Texas,” notably, it did not assert a state action immunity defense.  The court found the absence of a state action defense significant and somewhat unusual, stating:

Significantly, in this case, the TMB declined to assert any immunity defenses, including Parker immunity, solely as to Plaintiffs’ application for a preliminary injunction.  The normal deference afforded to a state under antitrust law is, therefore, not an issue in reviewing Plaintiff’s application for a preliminary injunction.  The Court’s opinion is properly read through that narrow, and unusual, lens.

Teladoc Inc. v. Texas Medical Board, No. 1-15-CV-343-RP (W.D. Tex. May 29, 2015) (order granting preliminary injunction).

In the wake of the Supreme Court’s North Carolina Board of Dental Examiners decision, whether the Board asserts a state action immunity defense in future proceedings will undoubtedly be closely followed and analyzed, as will any basis asserted for the defense.

Continue Reading Injunction Blocks Implementation of Texas Telemedicine Regulations

Last week, the Texas Medical Board issued a proposed rule (the “Rule”) clarifying that physicians must perform a face-to-face or in-person physical examination of a patient prior to issuing a prescription or risk sanctions for unprofessional conduct. The Rule states that a physician cannot prescribe any drug “without first establishing a defined physician-patient relationship,” which includes, among other things, documenting and performing a physical examination via a face-to-face visit or in-person evaluation. The face-to-face visit or in-person evaluation can occur through the use of telecommunications equipment that allows the provider to see and hear the patient such as through a two-way, real time video conference consultation, but the patient must be located at an “established medical site” – which does not include the patient’s home. Mental health services are explicitly carved out of the face-to-face or in-person evaluation requirement.

The Rule also provides that the use of online questionnaires, or questions and answers exchanged through email, electronic text or chat, or telephone evaluation of a patient are not adequate to establish a valid physician-patient relationship. Contrary to most states that prohibit prescribing based upon only an online questionnaire, the Medical Board appears to be taking the hard line stance that even online prescribing enhanced with such capabilities as telephone consultations, an online chat function, emails, or text will not be enough to meet the standard of care in Texas when prescribing for new patients. Continue Reading Texas Medical Board Issues Proposed Rule Restricting Online Prescribing

Written by: Ellyn L. Sternfield

Once again, a pharmacy employee has filed a qui tam involving a drug discount program, alleging that the failure of the pharmacy to use the discounted pricing as the “usual and customary” price in Medicaid and Medicare Part D billings resulted in falsely inflated claims to those programs. And once again, the qui tam case has survived a Motion to Dismiss.

In September of 2013, I blogged about qui tams based on usual and customary billings.  That blog post was prompted by a ruling in U.S. ex rel. Garbe v. K-Mart, that a qui tam Complaint alleging the chain pharmacy’s failure to use discounted pricing as the “usual and customary” price for medications in government program claims, was sufficient to pass muster under Rules 9(b) and 12(b)(6).

Pharmacy claim forms contain a required field for the pharmacy to submit its “usual and customary” price for the billed medication.  That price is often factored into the reimbursement formula for government-funded health care programs.  However, government programs each define how “usual and customary” price is determined, and when it comes to Medicaid, each state is free to define the term differently.  In some instances the term may be defined as inclusive of any discount offered (akin to a most-favored-nation clause), in other instances the term may be defined as an average charged to or paid by any payor, or in still other instances the term may be defined as the amount charged to or paid by any cash-paying customer.

Continue Reading Pharmacy Qui Tam Based On U&C Price Billing Survives Motion to Dismiss

Written By: Kimberly Gold and Ellyn Sternfield

Texas Governor Rick Perry signed a series of bills into law last week modifying some of the state’s Medicaid statutes and programs.  The laws will take effect on September 1, 2013.

While the legislation was purportedly aimed at enhancing the state’s ability to detect and prevent Medicaid fraud, waste, and abuse, in fact many of the statutory provisions were added to comply with federal mandates necessary to secure ongoing federal funding for the Texas Medicaid program to ensure  continued eligibility for incentive recoveries under its civil false claims act.  Continue Reading Texas Makes Changes to Medicaid Laws and Programs