Telehealth advocates are trying to capitalize on the positive momentum of two years of the COVID-19 pandemic to push for a more friendly physician licensing environment, while states are gradually adjusting cross-state medical policies. However, a complicating factor is that the fragmented U.S. physician licensing system has no universally accepted solution across the industry.

Some groups are pushing for broader adoption of agreements similar to the Interstate Medical Licensure Compact (IMLC), which allows physicians to obtain licenses in bulk across 38 participating states. Others are lobbying for reciprocal licensing arrangements between states. Telehealth stakeholders also disagree on the role the federal government should play.

Medical licensing falls under state authority, but some want Washington to step in and open the door for cross-state practice—during the pandemic, states relaxed licensing policies, allowing the nation to temporarily experience this cross-state service, and now those policies are being rolled back.

Virtual care advocates say opening up cross-state care is crucial for future patient access. However, the actual impact of expanding cross-state telehealth access remains unclear. Although cross-state telehealth use increased significantly during the pandemic, it still accounted for only a small fraction of total Medicare telehealth use, according to a recent study in Health Affairs.

Researchers at the University of Michigan found that in 2020, cross-state visits accounted for 5% of all virtual visits and 0.8% of all outpatient visits; between 2017 and 2019, these figures were 8% and 0.1%, respectively. Despite the low overall incidence, rural patients were more likely to use cross-state virtual care, suggesting it helps overcome geographic barriers and expand access. Additionally, although cross-state virtual visits accounted for less than 1% of visits in most states, usage varied significantly across the country, leading researchers to suggest that future telehealth access decisions are best left to individual states.

"In a short period of time, the discussion has changed," said Kyle Zebley, vice president of public policy at the American Telemedicine Association (ATA) and executive director of ATA Action, an ATA affiliate focused on lobbying state and federal governments to permanently implement temporary telehealth flexibility policies from the pandemic. "We now have a lot of data to look back on and prove that this approach works."

State level: starting point and obstacles

Zebley noted that the fact that medical licenses are issued and regulated by state medical boards "is, to say the least, a complicating factor in the delivery of cross-state medical services. Before the pandemic, it was certainly an obstacle."

Before the pandemic, telehealth licensing was primarily based on three models: obtaining a license in the state where the patient is located and providing services; joining a compact that allows cross-state practice; or obtaining a specific and limited temporary telehealth license. However, according to Latoya Thomas, senior director of policy and government affairs at virtual care company Included Health, cross-state practice was not common.

During the pandemic, states—as hospitals were overwhelmed and telehealth demand rose—provided temporary licenses to clinicians holding valid licenses in other states. At the peak of the public health emergency, all 50 states and Washington, D.C., used emergency powers to at least partially waive state licensing requirements.

But as the pandemic public health response winds down, more states are ending or allowing waivers to expire, leaving millions of patients without expanded telehealth access. According to tracking data maintained by the telehealth lobbying group Alliance for Connected Care, as of mid-April, 15 states still had licensing flexibility policies, down from 24 in early March. In most of the remaining states, cross-state licensing flexibility policies will expire this summer or are tied to the duration of the federal public health emergency.

Telehealth advocates say the loss of these waivers will affect patients who began seeing out-of-state doctors during the pandemic. "I do think this will be a precursor to a halt in patient care," Thomas said. It could also affect providers' ability to meet medical needs remotely, exacerbating healthcare worker shortages in many parts of the U.S. due to burnout and attrition.

Roy Schoenberg, CEO of telehealth company Amwell, called telehealth a "load-balancing infrastructure." The COVID-19 pandemic is one example of telehealth working in an emergency, but remote doctors could also be useful in other disasters, such as floods in Houston or fires in California. "We have all the clinical resources we need, but we are constrained by cumbersome administrative processes and cannot mobilize them," Schoenberg said.

Before the pandemic, the slow progress of cross-state care had multiple reasons. First, public demand for telehealth was low. Supporters of state medical boards (which issue licenses and regulate physicians) argue that allowing more cross-state medical services could affect physician quality and patient safety. Additionally, state medical boards have significant economic incentives to maintain the current licensing system, as a substantial portion of their revenue comes from license application and renewal fees. For example, the California Medical Board earned $56 million last year from physician renewal and application fees, accounting for 91% of its total revenue.

"States are all watching their bottom lines," Thomas said. "Waiving licensing requirements does affect revenue."

Compacts and reciprocity: industry paths diverge

Over the past decade, adoption of interstate compacts allowing cross-state practice has surged, expanding from the Nurse Licensure Compact, which allows nurses to practice in other participating states without additional licenses, to new versions for physicians, counselors, physical therapists, and other practitioners. Many telehealth industry figures believe that pushing more states to join compacts is the fastest path to promoting cross-state care.

"Currently, the only viable path forward is for states to join existing interstate compacts," Thomas said. "It's not perfect, but at least you get some uniformity in licensing. Right now, we lack that uniformity."

Specifically, the IMLC welcomed its 38th member state (Connecticut) in May and is supported by the American Medical Association (AMA) and the Federation of State Medical Boards (FSMB), which represents U.S. medical and osteopathic boards. The IMLC offers a streamlined application process that allows clinicians to apply for licenses in bulk, but it does not change the underlying licensing structure. It also does not allow reciprocity, so it is not a one-size-fits-all solution for telehealth providers wanting physicians to practice nationwide.

"You still need to apply, pay fees, and meet the requirements of each medical board in the states where you want to practice," Schoenberg said. Amwell uses the IMLC to obtain licenses for its Amwell Medical Group clinicians in multiple states. It is a time-consuming and expensive process—Amwell has a dedicated department responsible for obtaining multi-state licenses for its more than 6,500 internal physicians. Typically, Amwell's average licensing fee per state is about $1,000, meaning each physician would incur a total cost of about $50,000 to practice nationwide. Renewals occur every two to three years, with fees typically about half the initial cost, the company told Healthcare Dive.

"It's messy; there's no way around it. If clinicians want to provide services in every state, they must go through the same process as if they lived in each state," Schoenberg said. Additionally, some states have not joined existing compacts, including California and New York, which have large patient populations. Non-participating states often have active labor groups and many in-state physicians with reservations about compacts. However, interest appears to be growing: states such as New York, North Carolina, Virginia, and Indiana have pending legislation to join the IMLC.

"We support the Interstate Medical Licensure Compact and urge states to adopt it because it is an improvement over the status quo," said Zebley of the ATA. "But, with all due respect, we would prefer reciprocal licensing arrangements." Under reciprocity, states would mutually recognize medical licenses issued by other states, similar to the Nurse Licensure Compact. Physicians would be accountable for medical care in the state where the patient is located. Such arrangements could be adopted by state legislatures and have at least partial support from the FSMB.

Recently, the FSMB updated its telehealth policy for the first time in nearly a decade. The policy includes recommended exceptions allowing states to recognize cross-state services provided by physicians licensed in other states in specific situations, such as follow-up care, patients in transit, or second-opinion consultations. The FSMB document is not binding, but according to Zebley, past versions have been widely used by state legislators, regulators, and medical boards to develop telehealth policies. "Many areas are just common sense," Zebley said.

Federal role: limited but can incentivize

Although the federal government has no direct licensing authority, some members of the telehealth industry believe Washington could take a more proactive stance in certain areas. Amwell's Schoenberg argues that one of the most important things the federal government can do in the near term is to clearly designate simplifying cross-state care as a national priority and proactively decide what it believes are the best incentives and constraints.

The government could tie federal funding to states that adopt compacts or reciprocal licensing arrangements, or mandate automatic reciprocity. The Veterans Affairs (VA) health system has already adopted a similar model: any employed physician, regardless of where their license was issued, can provide virtual care to any VA patient, no matter where the patient is located. Telehealth researcher Ateev Mehrotra supports building on this. In a perspective piece in the New England Journal of Medicine last year, Mehrotra wrote: "Perhaps the most promising strategy is to use federal power to encourage reciprocity... As long as physicians hold a valid medical license, they could be allowed to provide telehealth services to Medicare beneficiaries in any state." He added: "Such a policy would likely accelerate state legislative efforts on reciprocity, thereby benefiting patients with other insurance types."

Although the Biden administration has expressed a desire to promote telehealth, there does not appear to be broad support in Congress or the White House for such a sweeping reform of the physician licensing system, even if only for telehealth. Two recent bills aimed at reforming cross-state telehealth licensing have not advanced past committee. One, introduced by Republican Rep. Ted Yoho of Florida, would tie funding for the Bureau of Health Workforce to adoption of the IMLC within three years. Another, introduced by Republican Sens. Ted Cruz of Texas and Marsha Blackburn of Tennessee, would temporarily authorize physicians licensed in one state to provide telehealth to patients in other states during the COVID-19 pandemic.

Given federalism principles, it is highly unlikely that Washington will replace state law. Experts say that because state laws fragmentedly govern the practice and delivery of medicine, there is no one-size-fits-all solution for cross-state care. This brings the discussion back to the state level. "Ultimately, for political and constitutional reasons, I think you still need to convince state legislators that adopting these policies is in their own and their constituents' best interests," Zebley said.