As the COVID-19 pandemic enters its third year, telehealth advocates are trying to leverage the positive momentum of virtual care to push for a more favorable cross-state practice environment for physicians. However, a real obstacle remains: the fragmented U.S. physician licensing system has no consensus solution across the industry.

Some groups are pushing for more states to join mechanisms like the Interstate Medical Licensure Compact (IMLC), which allows physicians to apply for licenses in bulk in participating states, with 38 states currently enrolled. Other organizations are lobbying for reciprocal licensing arrangements between states.

Telehealth stakeholders are also divided on what role the federal government should play.

Physician licensing falls under state authority, but some want Washington to step in and open the door for cross-state practice. During the pandemic, states implemented looser licensing policies due to emergency declarations, giving the nation a brief experience with cross-state telehealth, but these policies are now being rolled back.

Virtual care advocates emphasize that opening cross-state practice is key to improving patient access in the future. However, the actual impact of expanding cross-state telehealth remains unclear. Although cross-state telehealth use rose significantly during the pandemic, it still accounts for a relatively small share 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, those figures were 8% and 0.1%, respectively.

Despite the overall low rates, rural patients are more likely to use cross-state virtual care, suggesting it has real value in overcoming geographic barriers and expanding service coverage. Additionally, although cross-state virtual visits account for less than 1% of total visits in most states, there is significant variation among states, leading researchers to suggest that future telehealth access policies should be determined by individual states.

"The context of the conversation has changed in a short period of time," said Kyle Zebley, vice president of public policy at the American Telemedicine Association (ATA) and executive director of ATA Action, the ATA's arm dedicated to lobbying state and federal governments to make pandemic-era telehealth flexibilities permanent. "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 granted and regulated by state medical boards "is, to say the least, a complicating factor in the delivery of cross-state health care. Before the pandemic, it was certainly a barrier."

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

During the pandemic, states responded to hospital overload and rising telehealth demand by enacting temporary measures allowing clinicians with valid licenses in other states to provide services across state lines. At the peak of the public health emergency, all 50 states and the District of Columbia used emergency powers to at least partially waive in-state licensing requirements.

But as the pandemic public health response winds down, more states are ending or letting waivers expire, leaving millions of patients without the expanded telehealth access they gained during the pandemic.

According to tracking data maintained by the telehealth lobbying group Alliance for Connected Care, as of mid-April, 15 states still retained licensing flexibility, down from 24 in early March. In most remaining states, cross-state licensing flexibility expires this summer or is tied to the duration of the federal public health emergency.

Telehealth advocates warn that the expiration of these waivers will affect patients who began receiving care from out-of-state physicians during the pandemic. Thomas said: "I do think this will be a precursor to some kind of stagnation in patient care."

Furthermore, this could weaken providers' ability to fill health care needs remotely, exacerbating physician burnout and staffing shortages already present in many parts of the United States.

Roy Schoenberg, CEO of telehealth company Amwell, called telehealth "load-balancing infrastructure." He believes the COVID-19 pandemic is just one example of telehealth's value in emergencies, and that remote physicians can also play a role in other disasters, such as floods in Houston or wildfires in California. "We have all the clinical resources we need; we just can't mobilize them due to administrative barriers," Schoenberg said.

Before the pandemic, cross-state practice advanced slowly for multiple reasons. On one hand, public demand for telehealth was low. On the other hand, supporters of state medical boards, which issue and regulate licenses, argued that expanding cross-state medical services could affect physician quality and patient safety. Additionally, state medical boards have significant financial interests in the existing licensing system, as a substantial portion of their revenue comes from license application and renewal fees.

For example, California's medical board earned $56 million last year from physician renewal and application fees, accounting for 91% of its total revenue. Thomas noted: "States are looking at their own balance sheets. Waiving licensing requirements does affect revenue."

Compacts and reciprocity

Over the past decade, adoption of interstate compacts allowing cross-state practice has risen significantly, expanding from the Nurse Licensure Compact, which allows nurses to practice in participating states without additional licenses, to more professions such as physicians, counselors, and physical therapists.

Many in the telehealth industry believe that pushing more states to join existing compacts is the fastest path to promoting cross-state practice. Thomas said: "Currently, the only viable path forward is for states to join existing interstate compacts. 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 for clinicians to apply for licenses in bulk, but it does not change the underlying licensing structure or allow reciprocity, so it is not a panacea for telehealth providers seeking nationwide physician practice.

"You still need to apply to each target state's medical board, pay fees, and meet its requirements," Schoenberg said. Amwell uses the IMLC to obtain licenses for clinicians at its Amwell Medical Group in multiple states, but the process is time-consuming and expensive—the company has a dedicated department managing multi-state licensing for its more than 6,500 internal physicians. On average, Amwell's licensing fees per state are about $1,000, and nationwide practice costs about $50,000 per physician. Renewals occur every two to three years, typically costing half the initial fee, the company told Healthcare Dive.

"It's messy; there's no way around it. If a clinician wants to provide services in all states, they have to go through the same process as if they lived in each state," Schoenberg said.

Additionally, some states have not yet joined existing compacts, including California and New York, which have large patient populations. Non-participating states often have influential labor groups and local physician communities 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.

ATA's Zebley said: "We support the Interstate Medical Licensure Compact and urge states to adopt it because it's an improvement over the status quo. But frankly, we would prefer reciprocal licensing arrangements."

Under reciprocal licensing arrangements, states would recognize medical licenses issued by other states, similar to the Nurse Licensure Compact. Physicians would be responsible for medical care in the state where the patient is located. Such arrangements could be adopted by state legislatures and are at least partially supported by 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 accept physicians licensed in other states to provide cross-state care under certain conditions, such as follow-up care, referred patients, or second opinions. Although the FSMB document is not binding, according to Zebley, past versions have been widely used by state legislators, regulators, and medical boards to develop telehealth policies. "Much of it is just common sense," Zebley said.

Federal role

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 argued that one of the most important things the federal government can do in the near term is to clearly designate simplifying cross-state practice as a national priority and proactively decide what incentives and constraints it deems appropriate.

The government could tie federal funding to states adopting compacts or reciprocal licensing arrangements, or mandate automatic reciprocity. The Department of Veterans Affairs (VA) health system has already implemented a similar policy: 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 expanding on this strategy. In an opinion piece in the New England Journal of Medicine last year, he wrote: "Perhaps the most promising strategy is to use federal power to encourage reciprocity... A physician with a valid medical license would be permitted to provide telehealth services to Medicare beneficiaries in any state." He added: "Such a policy would likely accelerate state legislative efforts on reciprocity, thereby also benefiting patients with other types of insurance."

Although the Biden administration has expressed enthusiasm for promoting telehealth, there does not appear to be broad support in Congress or the White House for such a sweeping overhaul of physician licensing, even if only for telehealth. Two recent bills aimed at reforming cross-state telehealth licensing were introduced but did not advance out of committee.

One bill, introduced by Florida Republican Rep. Ted Yoho, would tie Health Resources and Services Administration funding to adopting the IMLC within three years. Another bill, introduced by Texas Republican Sen. Ted Cruz and Tennessee Republican Sen. Marsha Blackburn, would temporarily authorize providers licensed in one state to deliver telehealth services to patients in other states during the COVID-19 pandemic.

Given the federal system, it is highly unlikely that Washington will replace state law. Experts note that because states have different laws governing medical practice and delivery, there is no one-size-fits-all solution for cross-state care. This brings the discussion back to the state level.

"At the end of the day, for political and constitutional reasons, I think you still need to convince state legislators that adopting these policies is in their best interest and that of their constituents," Zebley said.