Doctors Without State Borders: Practicing Across State Lines

In the United States, a tangled web of federal and state regulations controls physician licensing.  Although federal standards govern medical training and testing, each state has its own licensing board, and doctors must procure a license for every state in which they practice medicine (with some limited exceptions for physicians from bordering states, for consultations, and during emergencies).

This bifurcated system makes it difficult for physicians to care for patients in other states, and in particular impedes the practice of telemedicine. The status quo creates excessive administrative burdens and like contributes to worse health outcomes, higher costs, and reduced access to health care.

We believe that, short of the federal government implementing a single national licensing scheme, states should adopt mutual recognition agreements in which they honor each other’s physician licenses.  To encourage states to adopt such a system, we suggest that the federal Center for Medicare and Medicaid Innovation (CMMI) create an Innovation Model to pilot the use of telemedicine to provide access to underserved communities by offering funding to states that sign mutual recognition agreements.

The Current System And Its Drawbacks

State licensure of physicians has been widespread in the United States since the late nineteenth century.  Licensure laws were ostensibly enacted to protect the public from medical incompetence and to control the unrestrained entry into the practice of medicine that existed during the Civil War.  However, it no longer makes sense to require a separate medical license for each state.

Today, medical standards are evidence-based, and guidelines for medical training are set nationally through the Accreditation Council for Graduate Medical Education, the Centers for Medicare and Medicaid Services’ Graduate Medical Education standards, and the Liaison Committee on Medical Education.  All U.S. physicians must pass either the United States Medical Licensure Examinations or the Comprehensive Osteopathic Medical Licensing Examination.

Although the basic standards for initial physician licensure are uniform across states, states impose a patchwork of requirements for acquiring and maintaining licenses. These requirements are varied and burdensome and deter doctors from obtaining the licenses required to practice across state lines.

For example, in all states, applicants must show proof of graduation from an accredited medical school and completion at least one year of a residency program, provide information about malpractice suits, and pay a fee to the state for initial licensure (usually several hundred dollars) and for license renewal (which in some states must be done annually).

In addition, some states require that applicants undergo further testing, complete specific course work, submit to a criminal background check, participate in a face-to-face interview, or provide proof of participation in other training programs or a log of continuing medical education courses.

Once applicants have fulfilled the initial license requirements, state agencies can take several months to process their applications.

Not only does this system impose direct costs on physicians who must decipher and comply with multiple states’ licensure requirements, but also it creates substantial indirect costs for both physicians and patients by preventing some physicians from practicing in those locations where they would be most productive and where the need for providers is greatest.

For instance, specialist shortages in rural areas are endemic, and patients must often travel long distances and endure lengthy waits in order to be seen by a doctor.

During public health emergencies, such shortages, in conjunction with state licensure requirements, can have especially harmful consequences.  As of 2008, 18 states did not permit exemption from licensure or expedited licensure for volunteer physicians during disasters.

In these states, any out-of-state private practitioners who render voluntary aid must in effect practice medicine without a license, potentially placing themselves at risk for civil and/or criminal penalties.

The impact on telemedicine. State licensure has had a marked effect on telemedicine in particular, effectively stifling its growth as an industry.  For decades, telemedicine has been touted as a potentially groundbreaking innovation which could benefit providers (lowering administrative costs, reducing barriers to relocating), patients (lowering the cost of care, increasing access, improving health outcomes), and payers (exerting downward price pressure on providers).

While the extent of these benefits is disputed,telemedicine has had success in several areas where it has been promoted.

A Better Path Forward

For years, various organizations have advanced proposals for relaxing the regulation of telemedicine and making it easier for physicians to practice across state borders.  For example, the Federation of State Medical Boards (FSMB) has endorsed and taken steps toward implementing a system of “expedited endorsement,” which offers qualifying doctors a simpler and more standardized licensure application process, but which still requires doctors to obtain a separate license for each state.

The Center for American Progress recommends that, short of the federal government implementing a single national licensing scheme, states should go further by adopting mutual recognition agreements in which they honor each other’s physician licenses (as they now do, for example, with driver’s licenses). Mutual recognition has already been adopted in Europe and Australia and has been successfully utilized by the Veterans Administration, the U.S. military, and the Public Health Service.  In addition, twenty-four states have signed on to a similar agreement for registered nurses and licensed practical/vocational nurses, called the Nurse Licensure Compact.

To spur action and help defray the costs associated with implementation, the federal government should encourage states to adopt mutual recognition agreements for physicians.  For instance, as noted above, the Center for Medicare and Medicaid Innovation (CMMI) could create an Innovation Model to pilot the use of telemedicine to provide access to underserved communities by offering funding to states that sign mutual recognition agreements.

Because similarly complex and burdensome licensing systems also deter advanced practice registered nurses (APRNs) from providing needed health services across state lines, CMMI should consider including incentives in the innovation model for states that include APRNs in their mutual recognition agreements.

Proponents of the current system may object that adopting mutual recognition would compromise patient safety or reduce the revenues that states derive from licensure fees.  Yet because standards for physician treatment, training, and testing already apply nationwide, requiring physicians to obtain separate licenses for each state in which they practice confers little additional protection on patients.

Mutual recognition could actually be designed in such a way as to raise overall standards, for example by requiring that participating states conduct physician background checks.  Similarly, states could offset potential lost revenue by increasing fees for multi-state licenses.

The reality is that state medical licensure is a vestigial system that imposes significant costs on society without furnishing any kind of commensurate benefit.  We can and should do more to address this problem.

Robert Kocher, MD  (@bobkocher) is a partner at Venrock and focuses on healthcare IT and services investments and serves on the board of Castlight Health. He is also a Non-Resident Senior Fellow at the Brookings Institution Engleberg Center for Health Reform and Co-Chair of the Health Data initiative, a joint effort of HHS and the Institute of Medicine.

This post is co-authored by Topher Spiro, Vice President, Health Policy, Center for American Progress ; Emily Oshima Lee, Policy Analyst, Center for American Progress; Gabriel Scheffler, Yale Law School student and former Ford Foundation Law Fellow at the Center for American Progress with the Health Policy Team; Stephen Shortell, Blue Cross of California Distinguished Professor of Health Policy and Management and Professor of Organization Behavior at the School of Public Health and Haas School of Business at the University of California-Berkeley; David Cutler, Otto Eckstein Professor of Applied Economics in the Faculty of Arts and Sciences at Harvard University; and Ezekiel Emanuel, senior fellow at the Center for American Progress and Vice Provost for Global Initiatives and chair of the Department of Medical Ethics and Health Policy at the University of Pennsylvania.

Kocher, Robert. Doctors Without State Borders: Practicing Across State Lines, Health Affairs Blog, 18 February 2014. Copyright ©2014 Health Affairs by Project HOPE – The People-to-People Health Foundation, Inc.

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18 replies »

  1. Medicine, like many computer apps, will stop being something on an ownership model and one that’s a subscription model. Your medical license will be a subscription based on MOC and fees. Your scope of practice will be dependent on which states you wish to “purchase coverage” in.
    I’m not sure what to think of this.

  2. Proposals such as these will only allow organizations such as the FSMB to push their expensive and unwanted maintenance of licensure program on physicians and allow another entry to the onerous and ridiculously expensive and unwanted maintenance of certification extortion program from the ABMS. When these unnecessary bureaucratic intrusions into practice can be stopped at the state level, patients and physcians will benefit.

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  5. Even leaving aside the telemedicine issue, the state licensure bureaucracy is an appalling system in this day and age of mobility and technology – essentially feudalism, restraint of trade, and a revenue stream for entrenched interests that adds no value to the safety and quality of care. It would be far better for communities if those resources went towards actually ensuring that licensed practitioners are competent on an ongoing basis – which is not a function of completing 50 hrs of CME annually.

  6. “State boards are fundamentally nothing more than localized protectionism.”

    Agreed. Those are narrow networks docs agree with. But you know, car dealers get the legislature to protect their turf as well. Here in NC people are prevented from buying a car over the internet without a local dealer being involved – good bye Tesla.

  7. ‘Vestigial’ is the right word to describe this. For those not in the know, a vestigial organ (like the appendix) is one that serves no value or purpose.

    The part I’m having a little trouble with is why we have such an esteemed group of contributors writing about such a no brainer topic. This is one of those rare issues on which I cannot fathom a reasonable disagreement between groups.

    As a practitioner with a few different active state licenses, it has always perplexed me as to the purpose of the varied systems. The exact same information is provided for each agency. And the fees are truly ridiculous – again, for unclear purpose – but I can at least tolerate the argument that someone is trying to make money from this.

    As to the issue of safety, I have watched these True Crime TV specials about ‘dangerous doctors crossing state lines without any safeguards’ with curiousity. How the heck are providers able to cross state lines and hide events from one state to the next? Isn’t there someone who actually checks the information that is provided? Isn’t that the purpose of those (ie) $700 state licensure fees that are paid every 1-2yrs? If anything, a nationalized system will provide greater safeguards because the information gets checked once annually or every other year and is standardized across all states.

    I think the idea of mutual recognition agreements is fine, but why such a tepid half measure? Minneapolis and NorthDakota can recognize each other’s licenses but California and New York can’t? I don’t get it. Why not just make an actual difference and just standardize and consolidate the entire system??

    • Because licensure (of drivers, hunters, practitioners, etc.) is governmental police power that is reserved to the states. I am not sure it would be so easy to have a federal license that every state is forced to recognize.

      • A nationalized licensing system would certainly benefit the shortage of healthcare providers in the U.S. There are three “upfront challenges” to healthcare staffing in the US: States, Dates, and Rates. State licensing while obviously beneficial to state sovereignty is a clog in the wheel to providing healthcare or thousands of underserved areas. The faster we as a nation come up with a resolution the faster we can save more lives.

    • The authors proposal is based purely on financial gain…..as a business man versus a physician.
      The liberal left coast has an extensive list of criminal physicians from all over the world, which overwhelms the board of medicine. The east coast and mid-western physician communities are less tolerant of unprofessional and pop-up medical practices, due to patients complaints.
      The standard of medical practice for a patient is based soley on trust to “Do no harm”. Each time the medical board investigates an accusation presented by the public, they in turn are also protecting your medical practice as well from harm.

  8. I could not agree more with the points made in this posting. Dr. Kocher is spot on. The issue remains one of federalism – and changing that construct for this lone issue seems like an uphill climb albeit it would be very good for the healthcare consumer.

    However, I am surprised by the editorial decision to not disclose that Dr. Kocher has a conflict here – he is on the board of directors and an investor in Doctor On Demand – a start-up telemedicine company founded by Dr. Phil of television fame that could financially benefit from the policy changes he is advising in this posting. There is nothing wrong with these business interests but Dr Kocher and THCB ought to disclose them.

    It seems to me that this should be disclosed both by the authors and by the THCB editorial team – as i believe this is the standard editorial policy for many publications.

    Finally – I posted a similar comment on this blog post when it was posted over at Health Affairs but the editorial geniuses at Health Affairs will not approve the comment – showing further the biases in their work and the fact that they are treating Dr. Kocher differently than others by not asking him to disclose his conflicts or enforcing their own stated editorial policy.

    I know THCB will do better than that.

  9. Reform of state medical boards is an idea that is about 30 years overdue. State boards are fundamentally nothing more than localized protectionism. All the gibberish about qualifications and the high-minded prattle about ensuring quality of care for patients is just a smokescreen for what the boards really do: keep consumers from getting information about physicians and protect doctors’ economic interests from perceived economic threats. You know, those really dangerous nurse practitioners and physician assistants and other credibly trained professionals who are well positioned to help take care of lots of people at lower costs and in more diverse settings.

    What’s needed is an interstate compact on the practice of medicine of the kind done for drivers licenses and interstate adoptions and child placement and many other interstate economic and environmental needs. This requires Congressional consent (yes, I know, asking state legislative leaders and medical boards to cavort with Congress will be like attending a rescreening of Dumb and Dumber). But, it would also require each state to pass a uniform statute, which could address telemedicine among other things. Having uniform statutes will help smooth the path to eventual regulations, enforcement, oversight, transparency, and consumer participation.

    In my experience, state medical board administrators and many of the overfed medical dinosaurs that sit on the boards suffer from the worst kind of cerebrovascular sclerosis. They are too ignorant to realize that the healthcare world is literally leaving them in the dust and too stupid to gracefully withdraw from the scene. It cannot be anything be anything but a boon for medical care consumers to dispense with the fiefdom model of regulation and replace it with a model that at least has superficial relationship with modernity.

  10. Agree that mutual recognition of state licenses would offer many benefits.

    I do wish the authors had commented on how different states might define telemedicine, or articulate what kind of care can/should be provided by telemedicine. Part of licensing medicine is to define what constitutes practicing medicine. Do different states have very different takes on what constitutes practicing medicine, and what can be provided via telemedicine?

    For me, a geriatrician who works especially with family caregivers, geriatric care managers, and other third parties, this issue has come up. If a person asks me for advice on the medical care of an aging parent, is this practicing medicine? Is care for the caregiver practicing medicine?

    Many are encouraging physicians to interact with patients and caregivers online and in learning communities, so this issue might become relevant for more clinicians in the future.

  11. The system is archaic at best. The issue is comes down to having licensing by state boards. It is necessary to have an all state or federal unified licensing examination.

  12. “Because similarly complex and burdensome licensing systems also deter advanced practice registered nurses (APRNs) from providing needed health services across state lines, CMMI should consider including incentives in the innovation model for states that include APRNs in their mutual recognition agreements.”

    Totally agree with that.

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