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Telehealth Reimbursement and Its Interstate Licensure Problem

Proponents of interstate licensure compacts see them as the solution to telehealth reimbursement challenges, but opponents disagree.

Source: Thinkstock

Telehealth’s great promise lies in allowing a doctor to treat a patient no matter where each are located. One of the biggest challenges to that platform is licensing.

A clinician must apply for a license in each state in which he or she wants to practice. For multi-state health systems, telehealth programs and specialists who work across the country, that means holding dozens of licenses and spending tens of thousands of dollars to keep them up to date.

Interstate licensure looks to solve those problems.

Interstate solutions to licensure

Licensing compacts seek to make it easier for clinicians to practice in multiple states, offering an expedited licensing process while keeping each state’s right to regulate its clinicians and take punitive action, if necessary.

The most noteworthy is the Interstate Medical Licensure Compact launched in 2014 by the Washington D.C.-based Federation of State Medical Boards, a non-profit representing more than 70 medical and osteopathic boards. The FSMB’s compact, which reached its threshold for implementation in 2015, now counts 17 states as members, with another two states awaiting action on legislation.

As they were creating the framework for a compact, organizers realized early on that they would need a platform that preserves state rights while giving clinicians an easier path to practicing across state lines.

“One of the most important consensus points that we continue to hear in discussions of possible models for medical licensure is that they should be state-based,” said Humayun J. Chaudhry, DO, President and CEO of the FSMB, said in 2013, when the compact was in its early stages. “Most policy experts agree state authority ensures the best assurance of patient protection in physician licensing – which remains our number one priority.  An interstate compact could address the need for efficiency and speed in licensing, while not compromising the inherent value of a state-based system, and most importantly, patient safety.”

The organization has also argued that a licensing compact would help reduce the nation’s growing physician shortage and improve access to specialists by enabling health systems to collaborate with clinicians no matter where they’re located.

Of course, physicians aren’t the only type of healthcare provider practicing across state lines. Nurses, behavioral health and occupational health counselors, physical therapists and any number of health and wellness specialists also find themselves reaching out to a much larger patient base, thanks in large part to telehealth.

“Many providers on the phone with a patient don’t ask the question, ‘Where are you at?’” Elliot Vice, director of governmental affairs for the National Council of State Boards of Nursing (NCBSN), says. “What we’re trying to do is put in a legal structure that facilitates” telehealth and makes that question unnecessary.

In reality, the FSNB predates the FSMB in seeking a national licensing structure for its 4.25 million RNs and LPNs in the country. Vice – who wryly notes the nation’s first such compact is actually the U.S. Constitution – says the FSNB began the conversation back in the 1980s when it noticed its nurses were being pulled into more and more jobs that crossed state lines.

The organization began with a Mutual Recognition of Licensure in 1997, which was adopted by some 25 states before interest began to wane. At about that time, the FSMB launched its compact, and the FSNB decided to wait and see how that project worked.

Eyeing the success of the FSMB’s compact, the nursing organization returned in 2015 with two new compacts to meet “the growing need for nurse mobility and clarification of the authority to practice for many nurses currently engaged in telenursing or interstate practice.”

The Enhanced Nurse Licensure Compact enables registered nurses (RNs) and licensed practical/vocational nurses (LPNs/VNs) to have one license that’s good in any member state, enabling them to provide telemedicine nursing services across state lines. The Advanced Practice Nurse Compact allows an advanced practice registered nurse (for example, a nurse practitioner) to hold one multi-state license with a privilege to practice in other compact states.

Other professional organizations advocating licensing compacts include the Federation of State Boards of Physical Therapy (FSBPT) and the Association of State and Provincial Psychology Boards (ASPPB). Both say a national licensing platform would greatly reduce bureaucratic hardships forced on its members, such as the East Coast-based physical therapist who has 30 licenses and the nationally recognized psychologist, an expert on death penalty cases, who spends $125,000 a year to maintain 25 different licenses.

Dig Deeper:

On Telehealth License Portability, Each State Follows its Own Path
Nurses’ Group Lobbies for Telemedicine Licensure
Telehealth Providers to Benefit from Interstate Licensure Compact

Interstate licensure compacts aren't without their detractors
Interstate licensure compacts aren't without their detractors

Source: Thinkstock

Opponents to interstate licensure agreements

Not everyone agrees with the concept of a licensing compact.

Michael L. Marlow, PhD, a free-market economist, has argued that any sort of licensing compact “creates market power for members of occupations, with little to no attendant gains in safety or product quality.”

“FSMB has now become part of a lucrative industry that imposes significant expense without value onto patients and practicing physicians,” Paul Martin Kempen, MD, PhD, director of the 5,000-member Association of American Physicians and Surgeons (AAPS) wrote in the spring 2016 issue of the Journal of American Physicians and Surgeons. “While non-physicians are being given the authority to practice medicine and prescribe without the physician oversight requirements of SMBs (state medical boards), physicians are being subjected to more expensive and onerous requirements, which bring in revenue for FSMB and other tax-exempt corporations, which lobby extensively and have achieved a high degree of regulatory capture.”

Shirley Svorny, a California State University-Northridge professor of economics and adjunct scholar at the Cat Institute, slammed the idea in a Wal Street Journal op-ed piece.

“(T)he compact protects the power of the state boards to shield physicians in their states from competition. It preserves the multiple fees physicians must pay to each state board,” she wrote. “Most troubling, the compact has distracted attention from, and muted calls for, reforms that would realize telemedicine’s potential.”

Some have suggested creating one license for physicians, good in all states and U.S. territories. Svorny, meanwhile, suggests one license for each physician based on the state in which he or she practices, rather than where his or her patients are located.

That doesn’t sit well with Roger Downey, communications director for telehealth vendor GlobalMed.

“A national license for physicians sounds good on the surface, but if we are to believe the opinions gathered from 1.8 million nurses [in a separate Wall Street Journal article on efforts for a nurse licensure compact], it isn’t needed,” he says. “And, if enacted, I believe it would lead to less vigilance and regulation of doctors. Applications would be rubber-stamped, unless a whole new level of bureaucracy was established. And that would be more costly and less effective than the present system in terms of public protection.”

One surprise opponent to the FSMB compact is the FBI, which says the compact’s commission isn’t a federal board and thus can’s access the FBI’s database to perform background checks on physicians. FSMB officials, however, says the compact is designed to give that power to state medical boards, which should have that authority. FSMB officials have said they hope to resolve their differences with the FBI in the near future.

Various states have also introduced language into their own telehealth regulations that define how out-of-state physicians can or can’t treat their residents. For example, Florida now allows out-of-state providers to treat residents via telehealth provided they meet the state’s guidelines, pay a $150 registration fee and refrain from opening an office in the state. New Mexico has created a telemedicine license for out-of-state providers that is valid for three years, and Missouri has legislation pending that would allow out-of-state doctors to treat Missouri residents provided they hold a valid license and they’ve first met with the patient in person.

The American Telemedicine Association, a supporter of the FSMB’s licensure compact, has called licensure portability “a contentious issue for healthcare providers” regardless of whether they’re using telehealth.

“Most states require that a physician is licensed in the state where their patient is located,” the organization wrote in a May 2015 analysis of each state’s physician practice standards and licensure requirements. “However, these state-by-state approaches prevent people from receiving critical, often life-saving medical services that may be available to their neighbors living just across the state line. They also create economic trade barriers, restricting access to medical services and artificially protecting markets from competition.”

Dig Deeper:

Is the Interstate Medical Licensure Compact Good or Bad for Telehealth?
Does Interstate Licensing Hurt the Telemedicine Market?

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