PUBLISHED:November 03, 2020

Richman expects incremental, not sweeping, reform of the nation's "complex" medical licensing system

This article originally appeared in Modern Healthcare magazine. Copy is provided below as the article is behind a paywall. 

October 24, 2020 01:00 AM

Medical licensing reform sought to support telehealth growth, help fight pandemics


State medical licensure has been a historical barrier to clinicians practicing across state lines. But the COVID-19 pandemic unearthed what some see as a need to reform licensure rules to ease the adoption and proliferation of telehealth.

During the COVID-19 public health emergency, the Trump administration suspended rules requiring physicians to be licensed where a patient is located in order to bill Medicare and Medicaid for medical services. Nearly all states followed suit by allowing out-of-state providers to practice without a permanent license during the pandemic. Some states waived in-state licensure requirements altogether; others let out-of-state providers apply for temporary licenses. How much additional care that supported is unclear. “We don’t really know how much practice was across state lines” during the pandemic, said Lisa Robin, chief advocacy officer at the Federation of State Medical Boards.

Still, some experts and policymakers say it’s time to start thinking about reforming licensure at the federal level. “We should not allow … state licensing requirements to prevent telehealth from occurring. We should be putting our patients first, and if a patient wants to see a (practitioner) who’s licensed in another state, there shouldn’t be huge barriers in the way of that happening,” Sen. Chris Murphy (D-Conn.) said.

There is a growing concern that the current patchwork of state medical licensing rules could slow telehealth’s growth and impair the nation’s response to the next pandemic since most states will likely return to their pre-COVID rules as the crisis subsides, experts said. Delaware, Michigan, Wisconsin and Washington, D.C., ended their licensure flexibilities earlier this year. At the same time, Idaho is the only state with concrete plans to allow out-of-state physicians to practice in the state permanently.

“We’re seeing a split in terms of how states are proceeding,” Manatt Health partner Randi Seigel said.

State licensure requirements are supposed to ensure that clinicians are qualified to practice medicine. But many experts worry those rules can limit access to care if they’re too restrictive and reduce the number of in-state practitioners or prevent out-of-state clinicians from delivering telehealth services.

States have increasingly tried to get around those issues by joining interstate compacts or entering into reciprocity agreements with other states. According to the Interstate Medical Licensure Compact, more than 30 states and territories are members of the agreement. But the three most populous states—California, Florida and Texas—don’t plan to join it. Another 33 states have implemented the Nurse Licensure Compact. New Jersey is also allowing nurses with multistate licenses issued by NLC member states to practice in the state.

Throughout the pandemic, many states have seen that their existing laws and rules don’t allow them to make changes to respond to crises quickly, said Arent Fox counsel Sarah Benator.

They “are probably going to be looking very closely to see whether or not their statutes (and) regulations are hindering the ability of their residents to get the healthcare resources they need,” she said.

Experts said that while medical licensure reform is needed, it faces several obstacles. According to Duke Law professor Barak Richman, providers should expect small, incremental changes to licensing requirements. It’s unlikely the U.S. will quickly get rid of the existing web of complex regulatory requirements, “even if it’s established that we have a federal marketplace for healthcare,” he said.

The roadblocks center on several concerns:

During the COVID-19 pandemic, the federal government and most states relaxed medical licensure requirements to improve access to care. There’s little evidence that those waivers led to a decrease in healthcare quality. But according to Lisa Robin, chief advocacy officer at the Federation of State Medical Boards, several states have seen an increase in complaints related to COVID-19 and telehealth. The federation doesn’t know what percentage of those complaints relate to out-of-state providers, but it is investigating.

Medical licensure fees are a significant source of revenue for many states. “Given the budgetary impact coronavirus has had on a number of states, they may not roll back the licensure requirements merely because it eliminates a source of revenue,” Manatt Health partner Randi Seigel said.

State licensing boards may not want to give up their power to collect fees, license providers and enforce licensure rules, experts said. “The authority to regulate the practice of medicine needs to be where the patient is located. You have to have a way for there to be accountability and for patients to have some recourse if something is wrong,” Robin said. State medical boards would prefer to opt into interstate compacts or reciprocity agreements for federal licensure. Physicians might also resist more competition from out-of-state providers, Duane Morris partner Neville Bilimoria said.

Geographical differences in standards of care probably aren’t a liability concern for physicians because their practice is mostly standardized across the country. But it could be an issue for other clinicians like nurse practitioners or physician assistants since their scopes of practice can vary considerably across state lines.

Why not federal oversight?

But it could make sense for the federal government to take the lead on reforming medical licensing since telehealth and pandemic response efforts require substantial coordination across states, experts said. The basic standards for physician licensure are mostly the same across states, but each state has different requirements for getting and keeping a license.

Some experts said it could make sense to move away from state-based medical licensure now that medical standards are evidence-based and national organizations set medical training guidelines. All physicians have to pass the U.S. Medical Licensure Examinations or the Comprehensive Osteopathic Medical Licensing Examination to practice medicine. Several experts said it’s unlikely that requiring physicians to get separate in-state licenses offers added protection for patients, especially when many physicians are also board-certificated.

“We have a funny mix of federalism in U.S. healthcare,” said Richman, who teaches health policy. The federal government regulates products and devices, leads public health initiatives and pays for most healthcare, “but the practice of medicine is regulated locally,” he said.

Federal policymakers are starting to take notice. Sens. Murphy and Roy Blunt (R-Mo.) introduced the Temporary Reciprocity to Ensure Access to Treatment—TREAT—Act in August. The bill would create temporary licensing reciprocity for healthcare professionals in all states for all types of services during the COVID-19 pandemic. Unlike the Trump administration’s temporary relaxation of licensing requirements, it would apply beyond federal programs regardless of what rules states have on the books.

“We’re hopeful (the TREAT Act) would be included in a COVID relief package that passes the House and the Senate,” Murphy said.

Some experts say it’s time to start thinking about policy changes outside the public health emergency. For example, Congress could require physicians to have a federal license to take part in federal healthcare programs like Medicare or Medicaid.

States could “piggyback” on the national licensing process to reduce physicians’ administrative work, lower healthcare costs and improve beneficiaries’ access to care, said Christopher Holt, director of healthcare policy at the conservative American Action Forum.

Though it would be a significant shift in medical licensure policy, it wouldn’t be unusual because the federal government often tries to change how providers and states behave by making them follow specific rules to take part in federal programs. For instance, Medicare requires physical therapists to have particular qualifications to bill for their services.

But “the risk in doing something like this is that instead of streamlining, you end up adding another level” of complication, Holt said.

Nancy Foster, vice president of quality and patient safety policy for the American Hospital Association, said that people inside the healthcare industry have talked about creating a federal licensing process for a long time. But it hasn’t happened yet because it would be challenging to implement.

“It requires more than just a law. It requires a whole infrastructure to do it right, and it’s not clear that the folks who were proposing this had thought through what that infrastructure would look like,” she said. Even if Congress created a federal licensing arrangement, it would be up to HHS to figure out the details.

Still, most experts agree that state medical licensing is an obstacle to telehealth and emergency preparedness.

People have “shared a number of stories with me about mental health providers who have to sever ties with their patients once their patients leave the state. That makes no sense,” Murphy said. “I’m open to different avenues to fix this problem, but I think we need to fix it.”