Teladoc, Inc. v. Texas Medical Board and Nancy Leshikar, in Her Official Capacity as General Counsel of the Texas Medical Board
453 S.W.3d 606
| Tex. App. | 2014Background
- Teladoc operates a telephone-based physician consultation service in Texas; physicians review patient records online and may prescribe after a phone consultation.
- The Texas Medical Board (TMB) sent Teladoc a June 2011 letter stating Teladoc’s telephone-only consultations violate TMB Rule 190.8(1)(L)(i)(II) (requiring diagnosis via “acceptable medical practices such as … physical examination …” and stating an "online or telephonic evaluation by questionnaire is inadequate") and warning of disciplinary action; the letter was copied to the Texas Medical Association.
- TMB contended its telemedicine rules (2010) and Rule 190.8 require a face-to-face physical exam to establish a physician‑patient relationship unless telemedicine permits an equivalent remote face‑to‑face.
- Teladoc sued under the Texas APA (Tex. Gov’t Code ch. 2001), arguing the June 2011 letter was itself a "rule" because it interpreted and effectively amended Rule 190.8, and TMB failed to follow notice‑and‑comment rulemaking.
- The trial court held the letter was not an unpublished rule and dismissed Teladoc’s APA declaratory claim; Teladoc appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the June 2011 letter is a “rule” under the APA | Letter is an agency statement of general applicability that interprets and effectively amends Rule 190.8 by requiring face‑to‑face exams (i.e., it has legal effect) | Letter is directed only at Teladoc and merely restates existing rule (not a general, binding rule) | Court: Letter is a “rule” as a matter of law under Tex. Gov’t Code §2001.003(6) because it implements/interprets policy, affects private rights, and was disseminated broadly (copied to TMA) |
| Whether the letter merely restates existing Rule 190.8 or changes it | Rule’s phrase “such as … physical examination” is illustrative; letter’s assertion that physical exam is always required rewrites the rule | The rule’s conjunctive wording and the clause rejecting telephonic questionnaires show the rule already requires in‑person exams | Court: Letter changes the effect of the rule (substitutes an ‘‘including’’‑type meaning for ‘‘such as’’ and removes the modifier "by questionnaire"), so it functions as an amendment and thus a rule |
| Whether the pronouncement is of general applicability | Teladoc: letter threatens disciplinary action against any Texas physician following Teladoc’s model; copy to TMA shows general application | TMB: letter targeted Teladoc and was not a blanket rule | Court: Letter was calculated to notify and bind the regulated public; therefore it is of general applicability |
| Remedy and procedural effect | Teladoc: letter is void under APA §2001.035 for failing to follow rulemaking; request for declaratory relief/remand | TMB: contends permitting such challenges would unduly restrict agency communications and adjudicatory flexibility | Court: Sustains Teladoc’s APA claim, declares the pronouncements to be a rule and invalid for lack of compliance with APA rulemaking; reverses and renders judgment for Teladoc |
Key Cases Cited
- El Paso Hosp. Dist. v. Tex. Health & Human Servs. Comm’n, 247 S.W.3d 709 (Tex. 2008) (agency interpretation that effectively amends existing rule can itself be a rule)
- Sunset Transp., Inc. v. Tex. Dep’t of Transp., 357 S.W.3d 691 (Tex. App.—Austin 2011) (informational notice that merely restates formal rules is not a rule)
- Entertainment Publ’ns, Inc. v. Comptroller of Pub. Accounts, 292 S.W.3d 712 (Tex. App.—Austin 2009) (letters conveying agency’s tax-code construction were rules where they bound agency employees and affected regulated parties)
- TGS-NOPEC Geophysical Co. v. Combs, 340 S.W.3d 432 (Tex. 2011) (administrative rules are interpreted under statutory‑construction principles)
- Leeper v. Tex. Educ. Agency, 893 S.W.2d 432 (Tex. 1994) (not every agency statement is a rule; APA excludes internal, non‑rights‑affecting statements)