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From Health Law Daily, January 5, 2015

Court calls telemedicine provider the victor in dispute over agency rulemaking

By Bryant Storm, J.D.

A Texas appellate court held that the Texas Medical Board (TMB) violated the state’s Administrative Procedures Act (APA) by altering the rules governing telemedicine through a letter to a telemedicine provider. The court held that because the TMB could not alter the telemedicine rules through a letter, without violating the APA, the Texas trial court had improperly denied the telemedicine provider’s motion for summary judgment. Accordingly, the appellate court granted the telemedicine provider’s motion for summary judgment and declared the rule void (Teladoc, Inc. v. Texas Medical Board, December 31, 2014, Pemberton, B.).

The letter. Teladoc, Inc., a telemedicine provider, received a letter from the TMB that, according to Teladoc, amended the rule setting out the circumstances under which a physician could provide telemedicine services. Teladoc contended that the letter from TMB changed the requirements defining “acceptable medical procedures” for telemedicine and the necessary prerequisite diagnosis circumstances that were required to precede telemedicine. Specifically, Teladoc asserted that the TMB letter established that a physical examination (including face-to-face examinations) was required in every case of telemedicine, contrary to the prior incarnation of the rule governing the necessary medical procedures for establishing a physician patient relationship.

Challenge. Teladoc brought a lawsuit challenging the letter as a rule change and a violation of the APA. Teladoc argued that the letter effectively altered the rule’s requirements, in violation of the APA, by substituting a phrase to change a list of examples into a list of requirements. Teladoc sought to have the court either invalidate the rule or require the TMB to adopt its new position through the notice and comment rulemaking procedures of the APA.

Rulemaking. The TMB asserted that the pronouncements in the letter did not constitute improper rulemaking under the APA because the rule was not one of “general applicability” because it was directed solely at Teladoc. The court disagreed and held that the TMB statements created rules that would affect not just Teladoc physicians but potentially all physicians practicing in the state of Texas. The court reasoned that the breadth of the so-called rule was only emphasized by the fact that the TMB sent a copy of the letter to the Texas Medical Association, a statewide organization representing Texas physicians.

Procedure. Rejecting the TMB’s assertion that the letter was explanatory, the court found that the letter was a substantive change to the telemedicine rules. The court further rejected the TMB’s argument that the result of considering its letter a rule would be to hinder the agency’s ability to notify an entity about why it violated a particular rule. The court reasoned that the difficulty to the TMB was not the relevant inquiry and that it was more important to ensure that the agency was following administrative procedures when issuing rules. Finding no reason to conclude that the TMB’s letter was anything less than a procedurally unlawful change of the telemedicine rules, the court declared the rule invalid.

The case number is 03-13-00211-CV.                                                    

Attorneys: Douglas D. Geyser, Assistant Solicitor General at Texas Attorney General, for Texas Medical Board and Nancy Leshikar. Carla J. Cox (Jackson Walker LLP) and Benjamin Geslison (Baker Botts LLP) for Teladoc, Inc.

Companies: Teladoc, Inc.; Texas Medical Board

MainStory: TopStory CaseDecisions HITNews TexasNews

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