ATC Weekend Update October 1

In this Weekend Update

ATC recps the past two city council series events
Norton Rose Fulbright highlights how the explosion of interest in telemedicine has created opportunities
IDA Ireland shares the news of WP Engine expanding their global presence in Ireland
A request from St. Edwards University to take part in an interdisciplinary programs survey

ATC Policy Recap

ATC Logo (1).jpg

The Austin Technology Council’s Policy Coalition finished its first two City Council outreach meetings last week. Designed to bring technologists, entrepreneurs, and elected officials together in a collaborative environment, these meet-and-greets are a critical touch-point for the tech community as ATC explores how to build a productive relationship between tech and City Hall.

Council Members Greg Casar and Sheri Gallo presented their legislative priorities to the founding members of the ATC Policy Coalition and the broader ATC community. While there are more Council Members left to meet, the ATC Policy Coalition is eager to engage on Austin’s critical policy challenges. Here are our key takeaways:

  1. Tech needs to get involved - While Austin’s TNC vote (Prop 1) this summer was the final impetus for tech’s renewed interest in City Hall, there’s never been a more important time for Austin’s leading industry to engage. From affordability and mobility to biotechnology and community health, Austin has a slate of pressing challenges and exciting opportunities. Austin’s political leadership, corporate executives, entrepreneurs, and technology companies all need to engage to realize the potential and promise of Austin’s future.
  2. City Council wants tech to get involved - Council Members are eager to engage with the tech community on pressing policy challenges. The overarching message from both Council Members Gallo and Casar is that tech must get involved with City Hall and there’s plenty of room for tech to help tackle Austin’s challenges. As the ATC Policy Coalition continues to host chats with Council Members, we look forward to learning more about where and how tech can most efficiently engage and solve community challenges.
  3. There’s plenty of room for the City to get ‘smarter’ - The City of Austin’s struggles go beyond a misunderstanding of the new economy. The efficacy and transparency of city permitting, planning, and budgeting processes all need improvement, and the tech community is uniquely positioned to support the City of Austin’s transformation to a Smart City.
  4. The ‘tech agenda’ is the community agenda - As Council Member Gallo says, “We have incredible needs in this City, and all of them are substantial.” The ATC Policy Coalition will lead the way for the tech community’s engagement on critical civic challenges. ATC’s endorsement of the 2016 Mobility Bond and the ATC Foundation’s leadership on STEM education are just two examples of tech engagement on community issues, and we’re eager to add more.
  5. Tech needs to get involved on its own terms - Traditionally in politics, advocates play offense or defense, but that is an old-economy paradigm. Austin’s technology community can and should bring its entrepreneurial spirit to City Hall — focusing on new, collaborative solutions to the community. Entrenching tech in a specific agenda is a disservice to both tech and the community. It’s time to get involved.

Our next Policy event is October 18th, with Council Member Pool, in WeWork Congress.

Texas Telemedicine Showdown

Telemedicine is a major area of innovation for tech companies and medical providers seeking to improve access to health care services.  According to its proponents, the promise of telemedicine is that it will bring health care to people who otherwise would have difficulty accessing services, such as patients in rural areas or those with mobility limitations.  Telemedicine also opens new avenues for health care professionals to provide ongoing monitoring of patients using new mobile technologies.  Beyond these advantages, telemedicine can bring more of a consumer focus to health care, with services structured around convenience and accessibility to patients.

Unsurprisingly, the explosion of interest in telemedicine has brought opportunities for a constellation of medical devices and other gadgets and gizmos to help doctors connect with patients directly.  In this environment, telemedicine startups have received lots of attention from investors: according to an Accenture study, among the top ten on-demand companies—most of which focus on delivery of people or food—two are focused on health care delivery.  That same study estimated that investment in on-demand health care companies could surge to $1 billion in 2017.  One of the leaders in this field, Texas-based Teladoc, Inc., raised more than $270 million in an IPO last year.

Meanwhile, in one of the largest potential markets for telemedicine services, a showdown has been brewing between Teladoc and the entity that regulates the practice of medicine in the state: the Texas Medical Board (“TMB”).

What is Teladoc?

Teladoc, Inc. was founded in 2002 and it currently claims to be the country’s largest provider of telehealth services.  Currently, there are approximately 15.4 million Teladoc members nationwide.  Teladoc provides access to board-certified physicians on a 24-hour basis for non-emergency treatments.  Organizations, health plans and employers typically subscribe to Teladoc’s services, which allows the organizations’ employees and members to contact Teladoc to request to speak with a physician licensed in his/her state.  According to the company, Teladoc’s medical services are generally more accessible and priced lower than conventional alternatives, such as a visit to the emergency room or an in-office physician visit.  A consultation may include advice, diagnosis and possibly a prescription for medication depending on what care is medically appropriate. 

Texas Regulations

The TMB is the state governmental entity that regulates the practice of medicine.  Since 2003, TMB regulations have prohibited doctors from prescribing prescription drugs without first establishing a “proper professional relationships” with a patient, which includes “establishing a diagnosis through the use of acceptable medical practices such as patient history, mental status examination, physical examination, and appropriate diagnostic and laboratory testing.”  22 Tex. Admin. Code § 190.8(1)(L).  TMB adopted regulations specific to telemedicine in 2004.  See 22 Tex. Admin. Code §§ 174.1, et seq. 

In 2010, TMB amended its telemedicine regulations to restrict the definition of “telemedicine” to consultations using “advanced telecommunications technology” that allows the provider to see and hear the patient in real time.  Id. § 174.2.  The amended regulations also required providers to conduct a physical examination of the patient in order to establish a “proper physician-patient relationship.”  Id. § 174.8 (“New Rule 174”). 

In response to these revised regulations, Teladoc limited its services in Texas by eliminating the option of video consultation and thereby removing its services from the regulatory definition of “telemedicine.”  In June 2011, however, TMB issued a letter to Teladoc warning that TMB regulations required a “face-to-face” examination prior to prescribing prescription drugs to patients. 

Teladoc sued the TMB in state court in 2011, arguing that the June 2011 letter amounted to an “unpublished rule,” and that TMB failed to follow the state’s Administrative Procedures Act (“APA”).  Eventually, in December 2014, Teladoc won a ruling from the state court of appeals, finding that TMB’s June 2011 letter violated the APA by failing to follow the proper rulemaking process. 

Thereafter, in early 2015, the TMB issued an emergency rule (“New Rule 190.8”) that would require an initial face-to-face interaction between patient and physician before a physician can issue a prescription.  According to TMB, these changes were designed to facilitate adoption of telemedicine while protecting the safety of patients. 

The Present Litigation

In April of last year, Teladoc filed a lawsuit in federal district court in Austin, arguing that the TMB violated federal antitrust laws in its regulation of telemedicine services in the state.  In particular, Teladoc alleged that TMB was seeking to block Teladoc—and other telemedicine providers—from competing with traditional brick-and-mortar physician practices, resulting in higher prices for patients and less access to physicians.

In its lawsuit, Teladoc argued that TMB acted contrary to the position urged by the vast majority of public commenters to its proposed regulation—203 of 206 public comments opposed New Rule 190.8. 

The TMB has argued  that there is nothing discriminatory about the new rules, as they apply equally to both in-state and out-of-state physicians.  Teladoc alleged that the new rules are discriminatory by practical effect and design; Teladoc’s business model depends on Teladoc being able to provide telehealth in Texas without a required in-person physical exam prior to treatment; no local benefits result from the rules given that the current regulatory scheme mandates standards of care dictating when an in-person physical exam is necessary; the current standard of care permits “on-call” services to patients of other physicians without an in-person physical exam; and the challenged regulations are, in fact, harmful to the public because they result in reduced access to affordable care. The court granted a preliminary injunction of the rule amendment pending a trial on the amendment’s validity, and then later denied the TMB’s motion to dismiss the suit, concluding that resolution of the legal issues in the case is inherently fact-intensive and that Teladoc’s allegations are sufficient at this early stage of litigation to allow the claim to move forward.

TMB has forcefully defended its regulation in court.  The TMB requested the lawsuit be dismissed on three separate grounds including a bar by the applicable statute of limitations, state action immunity from the antitrust claim and for failure to state a claim under the Commerce Clause.  Although the court denied these motions, TMB has appealed some of those rulings.

The U.S. Supreme Court has interpreted antitrust laws to confer immunity on anticompetitive conduct by the States when acting in their sovereign capacity.  Most recently, in North Carolina State Bd. of Dental Examiners v. F.T.C., 135 S. Ct. 1101, 1109 (2015), the Supreme Court held that states may in certain situations impose restrictions on occupations, confer exclusive or shared rights to dominate a market or otherwise limit competition in order to achieve public objectives.  States may only do so, however, if the purported anticompetitive conduct is clearly articulated and affirmatively expressed as “state policy,” and that the policy is “actively supervised by the state.”  In order to qualify as active supervision, “the supervisor must have the power to veto or modify particular decisions to ensure they accord with state policy.”

In the Teladoc case, the court concluded that the TMB could not claim state immunity because the State of Texas lacked sufficient control over the TMB.  The TMB argued that it is subject to active state supervision because its decisions are subject to judicial and quasi-judicial review, as well as legislative review.  The court disagreed with the TMB because such judicial review is limited to whether the state agency has exceeded its statutory authority and does not allow for the evaluation of the policy underlying the agency’s decision.  As in North Carolina Dental, the Teladoc court determined that there were no supervisory mechanisms in place that would allow for a determination that a decision of the TMB is in accord with state policy or for a modification of any decision made by the TMB.  As such, the court found that the TMB had failed to show the active supervision required to merit dismissal on the basis of state action immunity.

Recent Developments

In a series of legal rulings, Teladoc has so far resisted TMB’s efforts to have the case dismissed on various procedural grounds.  TMB’s appeal of one of those issues is currently pending before the U.S. Court of Appeals for the Fifth Circuit.

Just last month, the Federal Trade Commission (“FTC”) weighed in to support Teladoc’s position in the pending Texas litigation.  In its filing, FTC argued that TMB failed to show that “any disinterested state official ever substantively reviewed” the telemedicine rules “to determine whether the rules promote a clearly articulated state policy to displace competition rather than the private interests of active market participants.”  In a joint amicus brief with the Department of Justice filed on September 9, 2016, FTC petitioned the Fifth Circuit to dismiss TMB’s appeal of the district court ruling that the TMB regulations may be challenged under federal antitrust laws. 

What This Means for Telemedicine in Texas (and Elsewhere)

In a report from the National Center for Policy Analysis, Texas ranks 51 out of 51 (including Washington D.C.) in its implementation of telemedicine.  Earlier this summer, the Texas eHealth Alliance, a consortium of telemedicine technology providers, including Cisco and AT&T, and the Texas Hospital Association collaborated with hospitals and physicians to draft legislation that would overhaul the state’s telehealth laws.  The draft legislation is aimed at amending the state’s telemedicine laws to allow for multiple methods of technology-enabled treatment methods.  The group is hoping to advance this legislation during the 85th Texas Legislature in January 2017.  If the proposed legislation does not pass during the five months of the next legislative session, it will be another 19 months before the State has another opportunity to update the telemedicine statute.

As of now, the future of telemedicine in Texas is unclear.  The TMB does not appear eager to relax its stance on the delivery of healthcare through telemedicine.  Between the pending telemedicine legislation and the litigation between the TMB and Teladoc, Texas may see telemedicine changes in 2017.

And Texas is not the only state with telemedicine policies in flux: Medicare and other payers continue to approve additional telemedicine services that qualify for reimbursement.  In 2016 legislative sessions, forty-four states introduced over 150 telehealth-related pieces of legislation addressing issues such as reimbursement, licensing, technology requirements, Medicaid and standards of healthcare delivery.  As states continue to react to the growing utilization of technology in the delivery of healthcare, lawmakers will likely continue to adopt and amend state laws and regulations with telemedicine specifically in mind.

WP Engine expands global presence with new Innovation & Technical Support Centre in Ireland

WP Engine, a company that powers amazing digital experiences for websites and applications built on the WordPress platform announced the opening of its new Technical Support & Innovation Centre in Limerick today, which is expected to create 100 jobs over three years.

WP Engine is the leader in delivering managed services for premium websites built on WordPress. Today, approximately 5% of the online world visits a website powered by WP Engine every day. Globally, over 350,000 digital brands trust WP Engine with their online reputation across 136 countries and counting. Since the launch of its London office in 2015, WP Engine’s customer base has more than doubled. The opening of the Limerick centre, will further support the surging demand for managed WordPress across EMEA.

At an event in Limerick on September 26, Irish Minister for Jobs, Enterprise and Innovation, Mary Mitchell O’Connor, Finance Minister Michael Noonan and Minister of State for Employment & Small Business Pat Breen, and Mary Buckley, Executive Director of IDA Ireland, will be joining WP Engine CEO Heather Brunner, April Downing, CFO and Fabio Torlini, MD EMEA to celebrate the investment in the centre. The project is supported by the Department of Jobs, Enterprise and Innovation through IDA Ireland.

Welcoming the new initiative, Minister for Jobs, Enterprise and Innovation Mary Mitchell O’Connor said "This is a very exciting project and I am really pleased that we have attracted this cutting edge technology company to a regional  location and  that it is providing 100 quality jobs for Limerick. This follows on from recent jobs announcements which show that there is a momentum growing for jobs in regions around Ireland.   Ireland's growing expertise in the ICT sector and our commitment to ensuring that we can provide the requisite skills for companies like WP Engine is clear for all to see. I wish WP Engine the very best for their future in Limerick”.

Speaking at the launch today the Minister for Finance Michael Noonan T.D. said: "I welcome these jobs for Limerick and WP Engine to our neighbourhood. Both Ireland and WP Engine share an international focus and a desire to grow by creating value through hard work and endeavour. I'm confident that the people of Limerick and its surrounds will provide WP Engine with the skilled and motivated workforce it needs to continue its success."

Also speaking at the event Minister for Employment and Small Business Pat Breen T.D., said: "I very much welcome this announcement today in Limerick that WP Engine is establishing here, creating 100 jobs.  All jobs created have a positive knock on effect on the wider region.  It is important that we continue to pursue opportunities for investment and job creation in new and emerging technology sectors.  This investment is a testament to the skilled workforce and the attractiveness of the region.  I wish the team at WP Engine every success for the future.”

The company offers award-winning 24/7 support 365 days a year - a key factor in providing the best customer experience possible and building its reputation as the platform upon which the world’s best brands can rely. The expansion in Limerick, the first customer service hub outside the U.S., will allow WP Engine to continue to hire the best customer experience representatives regardless of geography. Further, drawing on the highly skilled technical talent in Ireland’s third largest metropolitan area, the new centre will also expand what is already the industry’s largest R&D organization with a dedicated team based in Limerick, working together with the team in the U.S. to accelerate development of WP Engine’s state-of-the-art managed WordPress platform.

IDA Ireland’s CEO Martin Shanahan said: “This is a terrific investment by this high growth technology company in a key regional location. Its presence here will serve as a compelling reference seller of the location for other technology companies. The benefit of 100 new jobs to the local area and economy will be substantial. I wish WP Engine every success here.”

With customers ranging from individuals and startups to multinational corporations such as AMD, Network Rail, New Relic, Soundcloud, UnderArmour and Warby Parker, WP Engine offers a subscription-based service for WordPress users, providing them with a range of managed services, including security, cloud hosting, developer tools, disaster recovery and internationally award-winning support. 

“WP Engine is focused on building the best managed WordPress platform in the world and we’re incredibly proud to be opening our new Technical Support and Innovation Centre in Ireland,“ said Heather Brunner, CEO of WP Engine. “As a company we aim to be present in cities that are successful in terms of job creation and attracting businesses - as represented by our offices in Austin, San Antonio, San Francisco, and more recently London. Limerick, similarly, has a terrific environment and culture where the community, government and business leaders are committed to building local talent and creating a technology innovation and incubation center. We wanted to help further build and be a part of that ecosystem.”

Francis Murray, Director of Sales, Big Dog Digital said, “We’ve been partners with WP Engine for over three years now and our relationship has gone from strength-to-strength. Finding the right managed platform for WordPress is a common challenge, but with WP Engine we have a partner that is as passionate about their business as we are about ours. What’s also important for us is their expertise and proactive approach in improving the support they offer. WP Engine’s agents give immediate and unique advice at any time of the day – no problem is too small.

“When WP Engine opened its London office, it was great for us to have someone in the same time zone. This new Technical Support & Innovation Centre is a great extension of that and is an additional selling point for us. Our customers love to hear that we’re based in Ireland and having a WP Engine and its WordPress managed platform here will give them even more confidence.” 

Colin Hanley, Founder, Managing Director, Media Lab said, “We turned to WP Engine to help secure our websites but we’ve also seen its speed, uptime and support make a real difference to our business. The excellent customer service we’ve received continues to improve. Although all of our queries are dealt with quickly and efficiently on the phone and online, this move to Limerick has been met with plenty of enthusiasm as it’s great to have a partner just down the road. We’re also excited to see a tech company from the U.S. move over to our own country and bring so many jobs with them.”

Gerard Hayes

St. Edward's Interdisciplinary Programs Survey

As we continue our effort to support the Austin business community and supply highly talented students for the growing economy, we would like your feedback. This survey will only take about 1 minute to complete but will provide us invaluable insight into preparing our students for your future hiring needs.

Upcoming Events