Explainer Episode 30 – An Update on Telemedicine Laws and Regulations

During the COVID-19 pandemic, federal and state governments relaxed rules that limit telemedicine—technology that enables people to access healthcare from their phones and/or computers—to allow more patients to receive care from the convenience and comfort of their homes. Now, as the pandemic wanes, there are significant debates over whether these changes should be made permanent. In this episode, the Goldwater Institute’s Christina Sandefur and the Institute for Justice’s Josh Windham explore the rationales behind telemedicine regulations and examine how reforms and lawsuits might transform how patients receive care.

Transcript

Although this transcript is largely accurate, in some cases it could be incomplete or inaccurate due to inaudible passages or transcription errors.

[Music and Narration]

 

Introduction:  Welcome to the Regulatory Transparency Project’s Fourth Branch podcast series. All expressions of opinion are those of the speaker.

 

Jack Derwin:  Welcome to the Regulatory Transparency Project Explainer Podcast, part of RTP’s Fourth Branch Podcast series. My name is Jack Derwin, and I’m Assistant Director of RTP. So today, I’m excited to joined by Christina Sandefur and Joshua Windham to discuss the latest regarding telemedicine laws and regulations. 

 

Christina Sandefur is Executive Vice President at the Goldwater Institute where she seeks to develop policies and litigate cases advancing healthcare freedom, free enterprise, private property rights, free speech, and taxpayer rights. Josh Windham is an Attorney at Institute for Justice, where his focus is on litigating cases defending economic liberty, medical freedom, and property rights in courts across the country. 

 

And with that, Christina, I’ll turn things over to you.

 

Christina Sandefur:  Great. Well, thanks so much, Jack. And today we’re going to talk about telehealth which is technology that allows people to get help from their healthcare providers directly on things like a smartphone or a computer or even a landline phone rather than having to go to a provider in person. So, of course, telehealth allows patients to get care from the convenience of their own homes. But, interestingly, government at all levels restricts who can give and who can receive telehealth. 

 

States often require medical professionals to have a license in the same state as the patient. So that means that a healthcare worker that already has the proper education and the training and the experience has to pay fees and get an entirely new license every time they want to provide telehealth in another state. And of course if they want to provide telehealth in states across the country, then they have to do that dozens of times over and over. Some states require an in person visit with a patient before a doctor can even consult with that patient or prescribe medication over the phone or video. And some government insurance policies like Medicare and Medicaid sometimes won’t pay for virtual services at all. 

 

Now of course, the COVID-19 pandemic has made telehealth more relevant than ever. In the early days of the pandemic, the federal government and most states actually relaxed a lot of these rules that limit telehealth so that patients could limit their in person appointments and protect their safety, which was really, really critical at that time. But now we’re kind of reviewing these reforms, and some policy makers actually believe that telehealth options shouldn’t go away even when COVID’s threat subsides. 

 

So at the federal level, we’ve seen Congress ease Medicare restrictions and allow more patients to get telehealth services and virtual prescriptions. At the state level, we’re seeing some really interesting things. Arizona just enacted a first-in-the-nation law that allows telehealth providers that are in good standing in another state to provide services to Arizonans via telehealth. So any medical service or consultation that can reasonably take place virtually between a doctor and a patient—and of course not all of them can—but any that can, can happen on digital communication now in Arizona. 

 

And this reform really has the potential to transform healthcare delivery. So if you think about, for example, the access to mental health services is going to increase significantly if patients can consult online with doctors that are outside of their state. And this, of course, is especially important as the pandemic has driven up cases of depression and drug abuse and suicide. And then community health centers are really going to be able to improve their health services for underserved populations, rural populations that otherwise wouldn’t be able to bring in specialized medical personnel. 

So these reforms are very interesting. We’re certainly living in a very interesting time for telemedicine regulation. But there are still a lot of other government barriers to telehealth and some of these regulations, some folks would argue, have actual constitutional implications. And, Josh, I know that at the Institute for Justice, you are actually challenging some of these restrictions on telemedicine in court. So why don’t you tell us a little bit about that lawsuit?

 

Josh Windham:  Sure and thank you. We’ve got a case down in South Carolina involving ocular telehealth, telehealth for your eyes. And I think the simplest way to start describing that case is to say that anybody who wears glasses or contacts is probably familiar with the traditional way of getting a prescription for new lenses. You go to an eye doctor, either an optometrist or an ophthalmologist, and you sit in a chair, and the doctor then pulls out this big clunky device with lots of lenses on it—it’s called a phoropter—and asks you to look through it. And he flips through the lenses and says, “Report what you see. Is that better or worse?” kind of ad nauseum. And your subjective responses then help the doctor calculate what’s called your refractive error, which is really just a fancy term for how bad is your vision. The doctor then uses that number to write your prescription for new lenses. 

 

So in 2014, a company called Opternatives—and the company’s now called Visibly—it’s my client—developed a way to take this process online. Using Opternatives’ software, patients could view a series of images on a computer screen and use their smartphone to report their responses just like they would do in the office. Opternatives, it’s software would then send those responses to an eye doctor who could decide whether, in his or her medical judgment, they have the information necessary to write a prescription for new lenses.

 

Now, in most states, Opternative was a huge hit. Patients, like you were saying earlier, Christina, especially those in rural areas or maybe those who worked long hours and couldn’t take time off to get to the optometrist office, really appreciated the convenience of being able to adjust or renew their prescriptions from the comfort of their own homes. But in South Carolina, the company hit a snag. It was about—I think it was 2015. Local optometrists drafted model legislation that was specifically designed to exclude Opternative from the market. They clothed the law in public health rhetoric throughout the legislative process, but we’ve gotten a bunch of internal emails throughout the discovery process in our case the reveal what their true goal was which was we need to stop Opternative from operating in South Carolina because they’re going to change the way that the business of optometry works here. Patients are going to stop visiting our in person offices, and so we can no longer sell them the expensive eyeglass frames that make up a huge portion of our revenue. 

 

Now, unfortunately the optometrists, or at least this association of them called SCOPA, succeeded. They got a law passed, and they even overrode veto at one point by then Governor Nikki Haley who called it protectionist legislation. And when the law passed and the veto was overridden, they publicly boasted about how they had shut Opternative down.

 

In 2016 after all this happened, we filed a constitutional lawsuit challenging the ban. And our argument is pretty straightforward. The law, in our view, violates the South Carolina Constitution because banning a technology that expands access to care just to protect established business models from competition isn’t a legitimate use of government power. And it’s kind of as a corollary to that, the law violates equal protection because the same year the ban was enacted, South Carolina adopted a really good general telemedicine law that allowed doctors in virtually all other contexts to prescribe using telemedicine. Even doctors who are eye doctors, for example, can prescribe things like topical creams and eye drops for your eyes. The only thing they can’t do is prescribe you lenses. And that’s not because lenses are somehow more dangerous than other things doctors prescribe. It’s because optometrists successfully mobilized in the legislative process to obtain a carve-out for their most profitable retail product. 

 

Now our case is ongoing, and I won’t bore everybody with the details of why it’s taken so long. But in short, we filed a bunch of going up and down the state’s appellate courts on some odd technical questions, and we’re expecting we’ll be back down in the trial courts for a decision on the merits within the next few months. So I’ll stop there, and we can get into a discussion if you like.

 

Christina Sandefur:  Yeah. You know, Josh, I want to back up to something that you said about that this was sort of cloaked in the guise of health and safety. But you know, really, aren’t in person visits better and frankly even necessary for some kinds of care? I think I get what you’re saying about how patients when their vision is being tested, a lot of that is subjective because the patient is reporting back to the doctor what he or she is seeing. But really one of the benefits of an in person doctors visit is that doctors have this immense training and ability to be able to catch problems other than those for what the patient is actually seeking treatment. 

 

So you can imagine someone who goes to the eye doctor just because they want to get a new prescription for their glasses or contacts, and that doctor may notice something else is wrong. Oh, you’ve got early signs of a retinal detachment, which we know can actually result in blindness. Or, oh, you have a macular degeneration. We need to do something about that. So in your case, aren’t eye diseases just going to go undetected if people just stop going into the eye doctor and just get their vision tests online?

 

Josh Windham:  Well, anything’s possible I suppose, right, but here I think it’s worth returning to the standard of care. The American Academy of Ophthalmology—and just to distinguish by the way, ophthalmologists are full on eye doctors. They perform surgery and that kind of stuff. Optometrists are more limited healthcare professionals. And so the AAO doesn’t recommend that you get a comprehensive eye exam for these sorts of latent conditions that you’re talking about until you reach the age of 40. So there’s a whole group of age brackets of customers who can use this technology without the kinds of thing you’re describing even really being a meaningful concern. Even after you reach age 40 though, the standard of care isn’t that you have to get a comprehensive eye exam every time you get new lenses. It’s that you should get one—it’s every two to four years until you reach age 54, and then every one to three years after that point. And Opternative, its user guidelines it doesn’t allow folks who can’t prove that they’ve gotten exams at these frequencies to even use its technology.

 

But imagine a patient who breaks his glasses or something and just needs to get a new prescription to replace them. As long as his doctor knows that he’s had a comprehensive eye exam either because that doctor has performed it or the patient has a medical record showing they’ve had it performed, there’s no medical reason why the patient then needs to go get one again just to get new lenses. And this came up in a deposition in our case actually. I was deposing one of the optometrists who spear-headed and kind of crafted the ban that we’re challenging. And I asked if he’d ever tested a patient’s visual acuity to help them get new lenses without doing a comprehensive eye exam. And he admitted he’d done that and that he didn’t feel like he was violating any sort of standard of care and that the patient, in fact, benefitted because otherwise she wouldn’t have gotten new lenses. She would have just stayed at home. He did an in house visit, actually, to her because she was infirm. 

 

And this is the kind of thing that I think Opternative is filling. It’s filling a gap in people’s ability to access limited medical care when it would be beneficial to them to do so.

 

Christina Sandefur:  Yeah. I think that’s a great point that we forget that sometimes it’s not an either or situation, right? Sometimes if folks are not willing or more likely not able to be able to make an eye doctor appointment in person, they may just forego that all together. So by requiring them to be in person, that doesn’t necessarily mean that people are always going to go in person. They just may never get their glasses updated. So that’s a really good point. 

 

You know, you had mentioned the protectionism angle. And I think it’s easy for those of us who believe in constitutionally limited government to say that when an industry acts in order to pass laws that keep out the competition that that’s a bad thing. But the other side would say well if telemedicine is legal and there aren’t restrictions, then presumably a lot of patients are going to choose that because it’s the easier option. They don’t have to go into the doctor. They can get services outside of work hours, things like that. So in the case of optometry, some people might just abandon traditional eye doctors all together, or they may not go as often, as we were discussing. And so isn’t that bad for the industry because we’re sort of admitting that there are some visits, there are some services that really are best or do have to be performed in person. And if telemedicine really starts taking ahold and people are taking more and more advantage of it, isn’t that going to hurt in person doctor visits and won’t ocular telemedicine put eye doctors or a significant number of eye doctors out of business?

 

Josh Windham:  I’m sorry. There’s a siren behind me. You know, I think that there’s no such thing as like a sacrosanct way of doing business or a way of healthcare distribution that the government needs to protect in terms of the business model of how we get care, right. I think that it’s actually probably going be a good thing if there’s a bit of market pressure on optometrists and/or ophthalmologists to incorporate this technology into their practices and to start connecting with patients in a way that’s actually convenient for patients. 

 

If we’ve learned one thing in this realm from the pandemic, it’s that a lot of things that we thought could only be done in person can actually be done using the internet, using new and evolving technologies. Most people didn’t even know what Zoom was until prior to the pandemic, and now we conduct so much of our lives on it. I think it just goes to show you that there’s not really—crystalizing in amber the way that optometric care was done in the ’20s or ’30s or ’50s or whatever isn’t necessarily the best way to ensure that folks in the 21st century get the care that they need. 

 

Christina Sandefur:  Yeah. And I think that that brings up another point that it’s hard to imagine what future technologies will be like. And sometimes I think people look at regulations as being backwards looking because regulations deal with what we know and existing technology. But they have, by definition, a difficult time dealing with the unknown or what’s coming in the future. And individuals and businesses that are free to be able to experiment there come up with some really neat things that improve our lives that, of course, regulations can stifle intentionally or inadvertently because they’re not forward looking.

 

Nevertheless though, when we think about what is a traditional government function, I think, again, even those of us who believe in very limited government, we will acknowledge that government exists to protect public health and safety, exists to protect our rights, but in doing so, it’s allowed to create reasonable regulations to protect health and safety. Legislators, of course, at the state level, the people who put into place the policies that you’re challenging in court, they’re elected to make these policy decisions. And again, healthcare is really traditionally a function of state government even more so than federal. And of course legislators also work with medical boards and health boards, and those people are usually experts in their field, so they understand better than the general public or even the legislators how healthcare works, how optometrists operate, and things like that. And so people will argue well they’re best suited to be able to create these rules that protect and serve patients, that they’re taking into consideration public health as a whole. They’re thinking about the industry. They’re thinking about safety. They’re thinking about how often patients need to be seen in person. And so even if you and I might disagree with a regulation, you’re really suing to challenge laws and rules that are put into place by duly elected legislators or duly appointed government experts. Isn’t this really the sort of thing, healthcare regulation, that courts shouldn’t be second guessing, that is really within the realm of traditional government function that legislators are supposed to legislate on?

 

Josh Windham:  Yeah. Well, I think the question itself may give a little bit too much credit to the legislative process, especially given the way that things have turned out in South Carolina and the way that this law came to be. But even giving the legislative process the benefit of the doubt and assuming it is as weighed and considered and beneficent as the question presumes, I think this is very much a judicial function to figure out whether these are legitimate exercises of the police power. 

 

There’s kind of two ways to think about this. One way is to say well, okay, states have something called the police power that allows them to enact reasonable regulations to address potential threats to public health and safety. And so because states have it, as long as a law is clothed in language that suggests it’s a healthcare regulation, there’s nothing a court can do and it has no role. I think the other view is to say that well, a court’s job is to say at the outset whether this even is a healthcare regulation, right, and whether it’s actually achieving anything for the public. Because if it’s not, if it’s not doing that, then it’s something else, and it’s serving a different function, right, and we have to figure out what’s that function it’s serving and is it a legitimate one.

 

And I think here, it’s pretty clear this isn’t a healthcare law. We know that because all South Carolina doctors in all other contexts are allowed to and trusted to use telemedicine as tools in their practices to obtain the information they need to prescribe things if it would meet the relevant standard of care in their field. And that’s nothing—there’s nothing about Opternative as a tool to learn about a patient’s refractive error that would violate the standard of care for like an ophthalmologist, for example. What this law really is is just an economic restriction on who can participate in the market at all. And I think that’s the kind of thing that courts should be in the business of ferreting out and identifying as illegitimate uses of government power. We don’t want state lawmakers to be using the government as an arm to pick and choose winners and losers in the marketplace.

 

Christina Sandefur:  Well, Josh, I really appreciate you taking the time to go through this with us. And I know you said the case is ongoing, so if listeners want to learn more about this case, where can they go?

 

Josh Windham:   Yeah. You can find it on our website at ij.org under our economic liberty tab. You can certainly find it there. And if you search my name as well on our website, Josh Windham, if you scroll down, you’ll find the cases I’m involved in, and you’ll see it listed there too.

 

Christina Sandefur:  Excellent. And I think we’re in a very exciting and interesting time right now as it pertains to telehealth. I think we are only starting to see the beginnings of regulations being changed, being scaled back, being challenged in court. Of course more states are going to follow in the footsteps of Arizona. If people want to learn more about the legislative changes that are happening in the states, they can visit my organization’s website at goldwaterinstitute.org. And I really appreciate The Federalist Society taking the time to talk with both of us about this important issue. And, Jack, I’ll turn it back over to you.

 

Jack Derwin:  Thank you both so much for taking the time to join us today to discuss such an important topic. And think you to our audience for tuning in to this episode of RTP’s Explainer Podcast. You can subscribe to this podcast on any major podcast platform. And check out our website regproject.org or our social media accounts @fedsocrtp to learn more. Thank you. 

 

[Music]

 

Conclusion:  On behalf of The Federalist Society’s Regulatory Transparency Project, thanks for tuning in to the Fourth Branch podcast. To catch every new episode when it’s released, you can subscribe on Apple Podcasts, Google Play, and Spreaker. For the latest from RTP, please visit our website at regproject.org. That’s R-E-G project.org.

 

[Music]

 

This has been a FedSoc audio production.

Josh Windham

Attorney

Institute for Justice


Christina Sandefur

Executive Vice President

Goldwater Institute


FDA & Health
State & Local

The Federalist Society and Regulatory Transparency Project take no position on particular legal or public policy matters. All expressions of opinion are those of the speaker(s). To join the debate, please email us at rtp@regproject.org.

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