Texas, The Last Frontier For Telehealth, Opens For Business

The ability of telehealth companies to do business in Texas--the last major U.S. market stymieing the growth of video doctor consultations--cleared a key hurdle when a bill widening patient access cleared that state’s House of Representatives.

The legislation opens a market of 28 million people to telehealth companies like American Well, MDLive and Teladoc, which have already been benefiting from expanding commercial coverage and employer health benefits administered and offered by large insurers like Aetna AET -1.10%, Anthem ANTM -0.50%, Cigna CI -1.99%, UnitedHealth Group UNH +0.06% and most Blue Cross and Blue Shield plans.

The passage in the Texas House last week is the latest legislative momentum for telehealth, which offers access to physicians and patients via smartphone, tablet or computer. Employers and private insurers are already embracing the trend as a way to make healthcare more convenient and avoid costly and unnecessary trips to the emergency room or a more expensive physician’s office.

"Unlike other companies who see telehealth as an app or a phone service, we have always maintained that telehealth should extend the relationship between patients and the healthcare brands they trust," American Well CEO Dr. Roy Schoenberg said.

Should Texas Gov. Greg Abbott sign the legislation as expected, telehealth companies say Texas would become the 50th and last state to legalize the "modern form" of telehealth and enable patients to see physicians without an existing relationship with a physician.

"To date Texas has lagged behind the rest of the country in establishing a supportive regulatory environment for the expansion of telemedicine, a proven delivery model for increasing access to care--especially for rural Texas--and providing a less costly alternative to visiting emergency rooms for non-emergency conditions," said Jamie Dudensing, CEO of Texas Association of Health Plans. "We're one step closer to removing barriers to this important technology."

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The legislation essentially allows telehealth consultations between a physician and a patient as long as the clinician complies with certain standards such as use of “clinically relevant photographic or video images, including diagnostic images,” according to the legislation.

“From our vantage point, the bill is singularly focused on making sure that care delivered through telemedicine adheres to the same generally accepted standard of care delivered in person," said Dr. Ray Callas, an anesthesiologist from Beaumont and chair of the Texas Medical Association Council on Legislation said in testimony in March. "Patients deserve no less.”

For Teladoc, which has been fighting Texas regulators for several years, the legislation should bring and end to its battle.

“We would be able to offer video in Texas where we don’t today,” Teladoc CEO Jason Gorevic said on the company’s first-quarter earnings call last week before the House voted. “The passage of this bill into law would resolve our outstanding issues with the Texas Medical Board and would represent a significant victory for the people of Texas in securing their path to quality, affordable and accessible healthcare.”

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