Texas Medical Board's Appeal Must Proceed Under Existing Jurisdiction Arguments

In another procedural defeat for the Texas Medical Board (the “Board”) over its embattled telemedicine rule, last week, a federal judge held that the Board waited too long to request certification of appeal to the Fifth Circuit. Thus the Board’s existing appeal will move forward under the collateral-order doctrine.  The Board's brief is available here.  Though this is a procedural setback for the Board, its appeal of the decision regarding its ability to escape antitrust liability under the state-action immunity doctrine is still pending before the Fifth Circuit.

As we have been closely following, in January 2015, the Board issued an “emergency” proposed rule requiring physicians to 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, Inc. and other Plaintiffs subsequently brought an antitrust claim against the Board alleging that the new regulation violates Section 1 of the Sherman Act and the Commerce Clause. The Board filed a motion to dismiss arguing (1) that the Board is entitled to state action immunity; (2) Plaintiffs’ claims were barred by the statute of limitations; and (3) Plaintiffs failed to state a claim under the Commerce Clause. A federal district court denied the Board’s motion to dismiss on all three grounds and specifically found that the Board is not entitled to state action immunity because its actions are not actively supervised by the state.

The Board appealed this decision to the Fifth Circuit, where parties are currently in the briefing stage.  Shortly after the Board filed its opening brief, the American Antitrust Institute filed an amicus brief arguing that the Fifth Circuit does not have jurisdiction to hear this appeal because the Board’s members are merely private parties and not state officers.  This sparked the Board to ask the district court to certify its order for appeal under 28 U.S.C. § 1292(b) so that the issue of state-action immunity can be considered by the Fifth Circuit.  The Boards request came almost 7 months after the district court’s ruling.

U.S. District Judge Robert Pitman refused to certify a new appeal stating that the jurisdictional question existed at the time of the initial appeal and that the Board took this risk when it filed the existing appeal without seeking certification under § 1292(b).  Judge Pitman wrote that:

Defendants now seek insurance against a risk that was identifiable, albeit not as well-articulated, months ago. This is not a sufficient reason for this court to enable the disruption of an already ongoing appeal. The court appreciates defendants’ argument that appellate review of the antitrust-immunity review might be beneficial, and if the procedural posture of the case were different or if a good justification for delay existed, the court might be more willing to entertain defendants’ motion.”

The Board’s existing appeal of its state action immunity argument will proceed with the argument for jurisdiction under the collateral-order doctrine.

Though this ruling is favorable to Teladoc and other providers seeking to provide medical services without an in person visit, Texas telemedicine providers still face an uncertain future. For now, Texas telemedicine providers can continue to practice under the prior regulations, which do not explicitly require an initial face-to-face or in-person examination prior to prescribing drugs.  Telemedicine providers should continue to follow this case as there could be implications for both state medical boards and telemedicine providers as they grapple with using telemedicine technology to enhance patient care while balancing the need for patient safety.

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