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Doctors Without State Borders: Practicing Across State Lines



February 18th, 2014

Editor’s note: In addition to Robert Kocher (photo and bio above), this post is 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.

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.

Note: In the interests of full disclosure, we point out that the lead author of this post, Robert Kocher, is a Partner at Venrock, a venture capital firm that is an investor, along with other investors, in the telemedicine start-up company Doctor on Demand, which — like many other companies and, we believe, many patients — could benefit from the policy changes discussed here.

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1 Trackback for “Doctors Without State Borders: Practicing Across State Lines”

  1. Doctors Without State Borders: Practicing Across State Lines | The Health Care Blog
    February 24th, 2014 at 5:26 pm

11 Responses to “Doctors Without State Borders: Practicing Across State Lines”

  1. Laurence E. Badgley, M.D. Says:

    Allow complementary and alternative medical doctors, who use natural non-toxic, nutritional, and preventative therapies absent prescribing of synthetic pharmaceuticals, access to nationwide medical practice and watch the incidence of degenerative diseases tumble. Establish national certification including telemedicine standards for these alternative practices, but leave double blind placebo controlled research criteria out of the evidence based requirements. Allow all patients the option of paying for their own alternative treatments irrespective of federal funding for their use of a parallel state licensed orthodox medical tract as necessary. Keep potentially toxic and risky therapies, e.g. synthetic medications and surgery, under local state control where they can be closely monitored. 

  2. Peter M. Klara MD, Ph.D. Says:

    My practice is currently limited to locums. I currently hold 12 state licences. If nothing else is done, standardized forms for licensure should be adopted by states and hospitals for credentialing purposes. This would serve to expedite and simplify the process without any degradation in the level of protection provided.

  3. Thomas Cox PhD RN Says:

    Ron: Personally I would favor much stricter licensing at the Federal level, eliminating the wasteful and inefficient state licensing failures we already have.

    But to suggest that having to get a license in a state you intend to work in is a restraint on interstate commerce is a really big stretch. It isn’t like there are guards at border crossings preventing doctors from obtaining licenses. If anything our current standards for interstate endorsement are far too lax.

    As well, we already know what the elimination of licensing, certification and professional review looks like – it is what we had before our current licensing, certification and professional review protocols back at the turn of the 20th century – a jungle in which charlatans, claiming to be physicians and healers preyed on gullible patients and their families promising cures they could not deliver and offering treatments that as often as not were more injurious than any of the adverse effects of treatment today.

    Eliminating standards doesn’t lead to higher standards of practice, it will further erode what little there is of the Marcus Welby standard of care. Most of our health care providers have already adapted to the most inefficient health care finance mechanism – capitation – the slide down that ethical slippery slope will only be steeper and faster if the few providers trying to care for patients have to compete with tens of thousands of new “MDs”, “nurses” and “hospitals” that act like the criminals they would be and do not meet any standards at all.

  4. Ron Hammerle Says:

    Matt, a professional license (purportedly for recognizing competence but really used by local practitioners to inhibit competition, fix prices and retrain trade) does not prohibit a state from enforcing its civil or criminal laws within its borders. What telemedicine proponents are advocating is the elimination of laws that prohibit interstate commerce.

  5. Humayun Chaudhry, DO, MACP Says:

    The Federation of State Medical Boards (FSMB) appreciates this timely dialogue on state medical licensure. The FSMB is pleased to report that state medical boards are making significant progress in developing an Interstate Medical Licensure Compact a newly proposed alternative pathway for state-based licensure which is expected to significantly reduce barriers to the process of gaining licensure in multiple states at a time when telemedicine is growing and millions of new patients are likely to enter into the U.S. health care system. Through the pathway proposed in the Compact, qualified physicians seeking licenses in multiple states would be eligible for expedited licensure in all states enacting the Compact. The proposed Compact improves upon an approach of pure mutual recognition, and includes procedures for state medical boards to identify who is practicing within their state borders as well as share complaint and disciplinary information, which ultimately increases public safety.

    Support is growing among legislators and health policymakers for the development of the Compact. In January, a bipartisan group of 16 U.S. Senators expressed support for this effort, which is expected to be of particular help in widening access to health care for patients in rural and underserved areas of the nation. The initial draft of the Compact was recently distributed to state medical boards and other stakeholders for comment. Revised drafts are expected to be available for review and consideration throughout the spring and summer of 2014.

  6. Thomas Cox PhD RN Says:

    While it is probably not possible to argue successfully for, or against, states rights on any ethical, political or efficiency basis without stumbling over each other’s blind prejudices, I have always come down on the side of statistics. States’ rights, ultimately revolves around the opportunity for every state to perform more, or less, poorly than average, on any given measure of success.

    Unlike Lake Wobegon, where all the states would be above average, our history of state’s rights virtually guarantees below average performance by about half of the states when objective measures of success are agreed on independent of whatever the states have done.

    Of course, from a purely risk management perspective there are indeed advantages to not putting all your eggs in one basket, as occurs when the Federal government makes a decision and it is either success or failure.

    But, having spent some time as a health care surveyor, I’d have to conclude that the quality of surveys performed by state surveyors is likely far below the quality of surveys performed by federal surveyors. Of course I may just live in one of the stellar under-performers that state’s rights permits. If the survey processes here are any indication at all, It is scary to imagine how bad physician and nurse licensing may be.

  7. Karl Stecher Says:

    I see this article, which argues solely on the point of having looser licensing requirements. I also believe that telemedicine exceptions can be made by individual states, after they have investigated the credentials of such individuals who are in fact providing medical care to patients in an individual state.
    I am on the other side of this issue . Doctors in one state should be under the authority of that state, and that state’s governor and legislature. The purpose of each state’s licensing laws is to insure that quality medicine is practiced in that state. But there have been glaring errors to this intention, as will be noted below.
    If I am a patient in state A, do I want to have my care partially managed from a doctor who has a license from state X, which may not have the same rigid requirements? No.
    Now, in California, nurses are allowed to perform abortions. Would that license extend to the other 49 states?
    There are indeed problems with some state medical boards. In Texas, the Board was so corrupt that it was investigated and several members resigned. In Colorado, the Board of Medical Examiners attacked a neurosurgeon’s license successfully, accusing him of the death of a brain surgery patient, although they were informed that the hospital (The Medical Center of Aurora) was being sued by a malpractice lawyer because the ICU nurse had overdosed the patient with morphine so that he could not breathe, under the direction of the hospital’s pulmonologist, then taken him off the respirator, leading to his eventual death. The error was covered up by a substituted second set of nurses notes, so that the neurosurgeon did not why his patient deteriorated. But the Board hid this information from the neurosurgeon, who was not sued, and did not know of the lawsuit as he was not a party to the case, but was to testify. In the appeal process, the lawyers for the Board admitted that they had hidden this information from the doctor, said they had no duty to inform him, and revoked his license. Nonetheless, my belief is that a micro(state by state) management will best assure quality medicine.

  8. Thomas Cox PhD RN Says:

    At first glance this seems like a very forward thinking idea. But there are a few problems that it is likely to occur that may limit the utility of such an approach.

    First and foremost, would be concerns about patient abandonment and neglect. Telemedicine would be a very distant relationship, potentially involving second hand information and too glib diagnostic responses. Telemedicine, at best, might entail a video chat with patients, but absent would be assessments of odor, gait and posture to cite just the most obvious information that would be absent. But there are also issues of potential fraud. How, for example, does a telemedicine doctor know whether they are actually seeing the patient they believe they are seeing?

    As well, national licensing also opens the potential for malpracticing physicians to glide from one state to another as their past poor conduct begins to catch up with them. As things stand, physicians must go through the often expensive and laborious practice of establishing credentials in new locales. Physicians guilty of poor conduct are the most likely to obtain licenses in multiple jurisdictions as part of their escape plans. As things stand, once aophysician is licensed in a new locale only definitive censure in a prior locale will lead to termination of licenses. This can take years as litigation wends through the courts in malpractice cases. In fact, most legitimate malpractice cases may never lead to censure at all – having been settled by physicians, patients and malpractice insurers with all the details sealed. Being licensed in every state would allow the worst offenders to move from state to state reminiscent of the old wild west where the bad guys could go from one jurisdiction where they were wanted to another and be protected from their past misconduct. Multi-state licensing would facilitate the worst physicians to continue providing sub-standard care for a normal career length.

    As well, there are other issues. While the ideal case might be the ability of a big city specialist to consult on the cases of patients in remote, underserved settings, this may not be the case at all. HMOs and managed care organizations could use such provisions to further erode the quality of their care, hiring physicians who would otherwise settle in where their incompetence may never be detected, and extending to them an opportunity to live in the hinterland and service patients who would otherwise be diagnosed and treated by better diagnosticians. Instead of Gregory House, the patient in Princeton-Plainsboro gets diagnosed and treated by an alcoholic, drug abusing physician living 1,000 miles away in a small town in rural Wyoming.

    The rationale of the HMO or MCO would be the same as it is now: A physician is a physician is a physician.

    But even if the physicians are excellent, what impact might such a plan have on rural and remote practice patterns? Given a choice between serving the needs of the local community and moonlighting – or daylighting – by treating people 1,000 miles distant who are willing to pay higher fees, might further erode the access to care in remote settings.

    But perhaps my biggest concern is the endorsement of the use of capitation-like health care finance mechanisms by the Center for American Progress. Capitation, the most demonstrably inefficient health finance scheme ever created, can never work in efficient health care (finance) systems because the inefficiencies of capitated health care providers, as insurance risk managers, dwarf their clinical efficiencies, leading to cuts in the quality and quantity of care they can provide. In essence, one’s position on capitation-like health care finance mechanisms serves as a definitive litmus test for credibility.

  9. Ron Hammerle Says:

    More than fifty years ago, Noble laureate Milton Friedman wrote of licensing: “the justification is always said to be the necessity of protecting the public interest. However, the pressure on the legislature to license an occupation rarely comes from members of the public. . .On the contrary, the pressure invariably comes from members of the occupation itself. . . .. Similarly, the arrangements made for licensure almost invariably involve control by members of the occupation which is to be licensed.

    “I am persuaded that licensure has reduced both the quantity and quality of medical practice; it has reduced the opportunities available to people who would like to be physicians; it has forced the public to pay more for less satisfactory medical services and it has retarded technological development both in medicine itself and in the organization of medical practice. I conclude that licensure should be eliminated as a requirement to practice medicine–” an argument and conclusion he shared with the graduating medical school class at the University of Chicago in a speech entitled “In Defense Of The Unlicensed Physician.”

  10. John Fembup Says:

    “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 . . .”

    I might support this, if I were confident that there were also an effective mechanism for ensuring that physicians who have lost their license or have been subject to disciplinary action in one state – would meet appropriate consequences in all states. I don’t see that in your suggestion. Since that kind of coordinated action does not happen now, it’s no good to suggest that is adequately addressed by current state oversight.

    So why shouldn’t the federales ask states to implement adequate, national oversight procedures before (or at the same time) asking the states to “go further” as regards mutual recognition of physician licenses?

    However I think your final sentence gives away your end game. You wish to abolish state licensure of physicians as “vestigial” – sorta like an appendix. Not all that surprising from an organization such as Center for American Progress that generally favors central government control . I suspect were it in CAP’s power, you would also abolish the appendix.

  11. Matt Says:

    How would states who differ on issues like abortion, marijuana, and assisted suicide hold physicians accountable for their actions if their right to practice in that state wasn’t governed by a license? You cannot nationalize the practice of medicine and still hold to states’ rights.

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