Sunday, May 31, 2015

Competitive Harm From State Licensing Boards: First North Carolina Dentists, Now Texas Physicians?

Changes in health care and health administration are taking place at a rate that does not allow for all parts of they system to remain in synchrony.  Frequently our health system as in many other areas of government intrusion progresses quicker than regulatory agencies can adapt to modern health policy.

Medical Boards also must react to changing practice patterns.. Technology is a great disruptive influence (one which I prefer to call 'catalytic innovation).

Our title today exemplifies the interactions between regulatory boards and the judicial process. They often do not work harmoniously as this case from North Carolina and Texas illustrate. These cases also illustrate conflict in interpretation of law enforced by the Federal Trade Commission, and adjudicated by our legal system.

Which takes precedence ? Standard of care, or anti-trust activity.   These two disparate concerns often conflict in health care, as
 'consumerism' invades professionalism.

The pace of technical innovation is driven by real necessity, to improve quality.efficiency, and to lower costs.

Or, what do these nine stone men have to do with telehealth ?

What should be a new era of medical board governance has begun with what looks more like a finger to the eye of the U.S. Supreme Court. On May 22, a federal district judge in Austin, Texas heard arguments to determine whether a rule adopted earlier in the month by the Texas Medical Board should take effect on June 3. No decision on a temporary restraining order has yet been issued, but the hearing offered a preview of litigation likely to arise under federal antitrust law as it was recently clarified by the nine justices.

The dispute in Austin pre-dates the Supreme Court’s ruling. For several years, the Texas Medical Board has been in litigation with Teladoc, a Dallas-based company that contracts with licensed Texas physicians to provide telephonic consultations to patients in the state. Teladoc physicians sometimes prescribe medications during those sessions, a practice that the Texas Medical Board has attempted to eliminate by an increasingly stringent set of interpretations and amendments to its longstanding Rule 190.8, which quite reasonably prohibits prescribing unless a physician-patient relationship has been established.

At the hearing, however, the fact that the Teladoc litigation had morphed from administrative law to antitrust law was lost on the Texas Medical Board’s lawyers. Based on the case it presented, the Attorney General’s office seemed unclear on the concept of competition being unlawfully hindered by licensing board action. The Assistant Attorney General arguing on behalf of the Board brushed aside Teladoc’s challenge on the ground that “practitioners are always looking for new avenues of attack on regulation,” and even claimed it was “kind of a distortion to be talking ‘business’” — entirely missing the point that established practitioners were being accused of abusing their regulatory privileges to insulate their existing business models from competition.

The Board still inexplicably allows “on-call” physicians covering for patients’ regular physicians to prescribe medication after a phone call. As the judge in Austin observed, there has to be “something more than ‘we’re doctors, trust us.’”

Only the Texas Medical Board knows why it adopted this particular rule at this particular time. It seems doubtful that preventing competition was its major goal. On the other hand, the rule doesn’t seem necessary to protect patients either.

And to add to the confusion how does state law interact with federal statutes ?

Does state sovereign immunity under the 11th Amendment to the Constitution constrain or prohibit suits for injunctions or damages involving bona fide state agencies that the federal antitrust laws now treat as private parties? (Teladoc sued the Board as a whole, and also sued each of the Board members who voted in favor of the new rule both as individuals and in their official capacities.) How will plaintiffs prove “antitrust injury” when action is being taken by a licensing board rather than by entities with whom the plaintiff is doing or wants to do business? Will these legal hurdles be easier to surmount when a board has adopted a blanket rule involving many potential competitors, as opposed to taking disciplinary action against a single competitor?

Stay tuned.
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