If you are a healthcare provider in Texas looking to supplement, or even transition, your practice into telemedicine, now is your time. Texas has always been a prime candidate for the benefits of telemedicine. It is an expansive state, with a large rural population that is often distant from medical care.

Thus, Texas residents are uniquely situated to take advantage of the outcome improvements and cost savings that telemedicine can provide.

Nevertheless, Texas was the last state to welcome telemedicine into its borders, in that it was the last state to abolish the requirement that a telemedicine provider first establish a patient-physician relationship via an in-patient visit. Now, after a lengthy court battle, this requirement has been eliminated, and providers are free to initiate patient-physician relationships in the telemedicine realm. While there was an immediate reaction by key players in the healthcare landscape to expand telemedicine in Texas, there remain a lot of unknowns that Texas healthcare providers should be aware of as they enter the world of telemedicine.

The Genesis and Outcome of Teladoc, Inc. v. Texas Medical Board

Teladoc, Inc. (“Teladoc”), one of the largest telemedicine providers in the United States, is based in Dallas and had been operating in Texas since 2005. Following amendments by the Texas Medical Board (“TMB”) to the state’s telemedicine regulatory scheme, Teladoc was forced to cease its telemedicine operations.

Eventually, Teladoc filed suit in federal court, alleging the TMB’s actions violated federal antitrust laws and the Commerce Clause of the Constitution. The parties then agreed to stay the proceedings to pursue settlement negotiations. These negotiations culminated in Texas Senate Bill 1107 (“SB 1107”), which was signed into law on May 27, 2017. Senate Bill 1107 abolished the requirement of an in-patient visit prior to utilizing telemedicine services. The new legislation applies across all telemedicine platforms.

Expansion Plans for Texas Telemedicine and Beyond

On September 22, 2017, the DWC announced “New 28 Texas Administrative Code § 133.30, Telemedicine Services” (the “Proposed Rule”). The Proposed Rule’s stated purpose is to “expand the accessibility of telemedicine services in the Texas workers’ compensation system by allowing health care providers to bill and be reimbursed for telemedicine services regardless of where the injured employee is located at the time the services are delivered.”

To reach this goal, the Proposed Rule included the removal of a Medicare-based reimbursement restriction that services be provided to injured employees at an originating site located in an area where there is a shortage of healthcare professionals. In other words, the Proposed Rule now allows a provider to bill and be reimbursed for telemedicine services no matter where the injured employee is located at the time the services are delivered.

Similarly, federal lawmakers are taking heed of the benefits of telemedicine. On November 7, 2017, the U.S. House of Representatives passed The Veterans E-Health and Telemedicine Support Act of 2017 (“VETS Act”). Much like the Proposed Rule issued by the DWC, the VETS Act eases geographic restrictions on telemedicine provided to veterans and aims to ensure that veterans, rural and disabled veterans in particular, can receive care across state lines.

The U.S. Senate passed its version of the VETS Act on January 4, 2018, which is slightly different than the House’s version, in that it bars individual states from taking disciplinary action against physicians who practice telemedicine across state lines.

Private employers are also noticing the benefits of telemedicine, and there has been a sharp increase in the number of large employers who see telemedicine services as a way to optimize how health care is accessed and delivered, while offsetting overall healthcare costs. More specifically, the Large Employers’ 2018 Health Care Strategy and Plan Design Survey found that 96 percent of large employers intend to make telemedicine services available to their employees at some point in calendar year 2018.

Considerations for the Telemedicine Provider

Whether a provider has been offering telemedicine services for some time or is just now getting in the game, there are some important issues to consider in updating or implementing telemedicine policies and procedures:

• Telemedicine is a moving target – As of now, there is no uniformity across state lines in the regulation of telemedicine. From state-to-state, many crucial statutory definitions vary significantly. It is unclear how federal legislation like the VETS Act will resolve these discrepancies, if at all. Therefore, providers licensed in different states or providing services across state lines should comply with the rules and regulations of every state they encounter, including formal, regulatory schemes and the practice requirements set forth by the state’s medical board.
• Data breach and cybersecurity risks – The provision of telemedicine exposes patients to increased cyber, privacy, and data security risks. Before launching a telemedicine practice, providers should conduct a thorough risk analysis aiming to implement policies and procedures that, at a minimum, comply with the HIPAA Security Rule and set forth an incident response plan that incorporates all applicable regulatory requirements.
• The battle for universal reimbursement – One of the major barriers to a provider’s implementation of a robust telemedicine practice is the lack of universal reimbursement, both from Medicare and private payers. Providers should consider this issue in building their telemedicine business models, as ultimately, the telemedicine industry needs universal reimbursement to become widespread and economically sustainable.

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Katie M. Ackels is a ligation attorney with broad experience for a diverse client base. Ms. Ackels primary practice areas are business litigation, employment litigation defense, personal injury litigation defense, and healthcare litigation. She graduated magna cum laude from Texas Tech University School of Law.