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Policy Analysis

November 15, 2017 | Number 826

Liberating Telemedicine
Options to Eliminate the State-Licensing Roadblock
By Shirley V. Svorny


ne of the most promising areas of from that of the patient to that of the physician. Digital
medical innovation is the expansion of patients would be no different from patients who travel
telemedicine, where medical profession- across state lines or national borders for care. A physician
als treat patients across great distances would need only one license, and would be responsible for
using electronic communications. A only one set of licensing laws governing the practice of
significant barrier to telemedicine is the requirement that medicine—that of his or her home state.
physicians obtain licenses from each state in which their A third option is for individual states to open their
current or potential patients are, or may be, located. markets to physicians licensed in other states, or to join
The best option is to eliminate government licensing other states in reciprocal agreements to honor each
of medical professionals altogether. Eliminating licensing other’s licenses.
would eliminate these barriers without compromising Finally, the federal government could offer national
quality. State medical licensing boards often place the telemedicine licenses, an option that would require a new
interests of physicians ahead of patient safety. Health federal agency, additional costs, and—like existing state
insurers, medical malpractice liability insurers, hospitals, licensing boards—would be vulnerable to capture by phy-
and others—many of whom are liable when a physician sician groups that seek to erect barriers to telemedicine.
injures a patient, and all of whom seek to protect their One supposed reform—the Interstate Medical Licen-
reputations—would continue to protect patients by sure Compact—does not increase license portability. Under
doing periodic, substantive reviews of physician skills the Compact, physicians who wish to treat patients in
and qualifications. other states still must obtain separate licenses from each of
A second-best way to eliminate barriers to affordable, those states. The Compact merely attempts to streamline
quality care would be for Congress to redefine the loca- the process of applying for multiple licenses. State medical
tion of the interaction between patients and physicians boards designed the Compact to protect the status quo.

Shirley V. Svorny is professor of economics at California State University, Northridge, and an adjunct scholar at the Cato Institute.

Fifty years in farming had given Tom Soukup examines policy options that would allow
Telemedicine a few brushes with his own mortality, but interstate telemedicine to flourish. 2
enables after a cow pinned him against a wall, death The main barrier to telemedicine is the
felt closer than ever. He lay on the muddy requirement that physicians obtain licenses
patients to ground and began to pray, every gasp feeling from each and every state in which their cur-
seek care from like a stab to the chest. rent or potential patients are, or may be,
providers Although the nearest clinic was only located. The best option is to eliminate state
whom a 10-minute drive from Soukup’s South licensure of medical professionals altogether.
Dakota ranch, the doctor on duty did not Eliminating licensing would eliminate these
they would have much experience treating such injuries. barriers without compromising quality. Even
otherwise He had rarely inserted chest tubes and want- without government licensing, health insur-
need to ed guidance from another physician without ers, medical malpractice liability insurers,
having to consult a medical reference book. hospitals, and others—many of whom are
travel to see, So the clinic in tiny Wagner connected by liable when a physician injures a patient, and
including top video to doctors in Sioux Falls, who talked all of whom seek to protect their reputa-
specialists him through the steps to stop the bleeding tions—would continue to protect patients by
who may and drain the blood collecting inside the doing periodic, substantive reviews of phy-
72-year-old man back in March 2010. sician skills and qualifications.3 In contrast,
be located It’s a system that’s gaining wider use state medical-licensing boards often place the
thousands of across the rural U.S., where there are often interests of physicians ahead of patient safety.
miles away, few primary care doctors and even fewer Alternatively, individual states could open
emergency rooms. Although so-called tele- their markets to physicians licensed in other
and it offers medicine has been around for at least two states. In 2016 the Florida Senate scaled back
life-saving decades, the practice fast is becoming a stan- a proposal that would have made Florida the
assistance dard feature in many small communities, first state to move on this front. 4
in emer- even as other public services such as police Given the lack of progress at the state level, a

and fire protection decline. 1 second-best, and perhaps quicker, way to elimi-
gencies. Argus Leader, Sioux Falls, June 8, 2014 nate barriers to affordable, quality care would
be for Congress to redefine the location of the
interaction between patients and physicians
INTRODUCTION from that of the patient to that of the physician.
One of the most promising areas of medical Digital patients would be no different from
innovation is the expansion of telemedicine, patients who travel across state lines or national
where medical professionals treat patients borders for care. A physician would need only
across great distances using electronic com- one license, and would be responsible for only
munications. Telemedicine enables patients one set of licensing laws governing the practice
to seek care from providers whom they would of medicine—that of his or her home state.
otherwise need to travel to see, including top Finally, the federal government could offer
specialists who may be located thousands of national telemedicine licenses, an option
miles away, and it offers life-saving assistance that would require a new federal agency, addi-
in emergencies. Telemedicine can enhance the tional costs, and—like existing state licensing
productivity of physicians and even patients, boards—would be vulnerable to capture by
such as when workers avoid lost work time physician groups that seek to erect barriers
by substituting convenient, on-demand video to telemedicine.
interactions with a physician for a routine One supposed reform—the Interstate Med-
office visit. While telemedicine is growing in ical Licensure Compact—offers little to move
use and acceptance, state licensing laws keep interstate telemedicine forward. The federal
it from reaching its full potential. This paper government funded the Interstate Medical

Licensure Compact with the goal of enhanc- is the norm. 13 Studies of the impact of the use
ing license portability—the ability to practice of telemedicine to treat chronic conditions find The list of
in multiple states based on one’s home-state lower mortality, reduced hospital admissions, areas where
license. Yet the Compact does not increase lower costs, and increased patient satisfaction. 14
license portability. Under the Compact, physi- Telemedicine can even assist school dis-
cians who wish to treat patients in other states tricts when it comes to the cost of school can improve
still must obtain separate licenses from each nurses. A program in South Dakota uses tele- outcomes is
of those states. The Compact only attempts to medicine to resolve the high cost of having a
long and is
streamline the process of applying for multiple nurse at every school. 15

licenses. State medical boards designed the Telemedicine has been a boon to rural
Interstate Medical Licensure Compact not to communities. In emergent care, telemedi- rapidly.
disrupt the status quo, but to protect it. cine provides immediate access to specialists,
allowing patients in remote areas to receive
prompt treatment. In nonemergent situa-
TELEMEDICINE TODAY tions, it offers day-to-day and specialty care
Telemedicine can be as simple as a video without long commutes. 16 Getting physicians
or telephone consultation with a physician or to move to rural areas is a perennial problem.
nurse, or as sophisticated as using “robots”— Telemedicine is giving rural residents broader
roving computers with cameras, microphones, and more convenient access to physicians.
and speakers—in emergency departments and Where it was once common for residents of a
intensive-care units to offer patients remote rural Alaska town to fly to a nearby community
access to specialists in cardiology, mental to see a physician, now a cart equipped with a
health, neonatology, neurology, pediatrics, and webcam and scopes eliminates the trip. 17
other areas of medicine. 5 Store-and-forward
telemedicine—where providers send scanned A Substitute for Traditional Office Visits
images and information to distant experts Telemedicine offers a convenient substitute
for remote evaluation—is useful in radiology, for traditional office visits. 18 Video or phone
pathology, dermatology, ophthalmology, and appointments save time and money for con-
other specialties. Remote reading is available sumers and providers. Based on its experience,
around the clock. 6 Kaiser Permanente estimates that about a
The list of areas where telemedicine can quarter of its current appointments could take
improve outcomes is long and is expanding rap- place via telemedicine rather than in-person
idly. It includes emergency stroke intervention, 7 office visits. Kaiser’s tally of the benefits
military applications (where it can eliminate includes reduced commutes (saving time and
risky patient evacuations), 8 diabetic monitor- reducing carbon emissions), reduced medical
ing and care, 9 replacing on-call physicians, 10 facility construction, expanded access to time-
delivering care to Parkinson’s patients, 11 mental ly care, and increased workplace productivity. 19
health services, 12 and many other situations. Capital is flowing into innovative telemedi-
Broader use of telemedicine is likely to improve cine efforts. 20 Companies such as American
outcomes for patients with rare diseases by Well supply Web and mobile platforms for video
allowing physicians who specialize in those dis- visits. American Well partners with health plans
eases to treat a cohort of similar patients across and pharmacies (including CVS, the largest U.S.
the country or around the world. chain) to facilitate access to on-demand video
The potential for telemedicine to reduce the visits. American Well also offers administrative,
cost of health care by monitoring individuals liv- security, and recordkeeping support services.
ing with common chronic diseases is substantial, UnitedHealthcare, the largest U.S. pri-
as chronic disease is expensive to treat and poor vate insurer, has contracted with Doctors on
compliance with physician recommendations Demand, NowClinic, and American Well to

offer “on-demand online access to a physician Quality Concerns
Telemedicine via mobile phone, tablet or computer 24 hours One concern is that teleprofessionals could
can make a day,” and has added a “network of care pro- fail to refer patients to a nearby physician
viders offering video-based virtual visits.” 21 when a virtual exam is not sufficient. Yet tele-
health Wellpoint’s Anthem Blue Cross offers its medicine providers face the same incentives
care more LiveHealth Online services to its insureds. 22 not to miss diagnoses that in-person physi-
convenient Telemedicine can make health care more cians do. The threat of liability is a powerful
and convenient and affordable, even for consumers force for quality assurance. Telemedicine pro-
whose insurance companies do not cover vir- viders who fail to refer when appropriate or
affordable, tual doctor visits. Large, direct-to-consumer who make other mistakes will find themselves
even for service providers include American Well, subject to liability claims and higher medical
consumers MDLIVE, Doctor on Demand, and Teladoc. malpractice liability insurance premiums.
Access to virtual doctor visits has the add- Medical malpractice liability insurers like-
whose ed benefit of improving labor productivity by wise face the same incentives to monitor and
insurance eliminating commute and wait times and the promote the quality of care by telemedicine
companies related costs associated with missing work. providers as they do with other providers they
do not cover Seventy percent of large employers surveyed insure. Malpractice insurers educate providers
by the National Business Group on Health in on how to reduce the risk of patient injury by
virtual doctor

2016 reported offering telehealth benefits. This practicing safer medicine. 29 They also reward
visits. is up from 48 percent in 2015. The National providers who comply with quality programs
Business Group on Health expects telehealth by offering them lower insurance rates. Finally,
benefits to be nearly universal by 2019. 23 it is not uncommon for carriers to write specif-
Towers Watson, a business management ic standards into medical professional liability
consulting firm, estimates that an average insurance contracts with the providers they
employer would profit from including telemedi- insure, and to insist on compliance in exchange
cine in employee benefits if more than 7 percent for insurance coverage. 30
of those insured were to use it. With savings on Brand-name reputation offers further
emergency room, primary care, and urgent care patient protection. Companies invest sub-
visits, Towers Watson estimates that employers stantial resources in promoting their brands.
as a whole could save $6 billion annually. 24 Teladoc advertises that all of its doctors
Telemedicine offers health care profes- are board-certified in their medical special-
sionals flexibility to choose the hours they ties, that its physician credentialing process
wish to work. Providers can work from home meets National Committee for Quality Assur-
via a home-based telemedicine station. 25 ance standards, and that the company has
Physicians, pharmacists, advanced practice been on the receiving end of “zero malprac-
nurses, or other providers need not be located tice claims.” 31 Many telemedicine providers
in the specific area they serve. further reassure patients by seeking accredita-
Telemedicine reduces waiting times for care. tion from the American Telemedicine Associa-
Users of teleneurology for strokes can bring a tion. 32 Telemedicine providers face enormous
remote physician to examine a patient within 3 financial incentives to avoid tarnishing these
to 6 minutes. 26 According to Dr. Todd Samuels, reputations by providing substandard care.
a board-certified neurologist, he can “provide
much more timely care as a teleneurologist
than . . . as a bedside neurologist.” 27 Remote GOVERNMENT ENCOURAGEMENT
consultants can serve multiple facilities and dis- OF TELEMEDICINE
tant communities 24 hours a day, 7 days a week. The federal government encourages
Teladoc reports a median physician response telemedicine in various ways. 33 The Fed-
time of less than 10 minutes. 28 eral Communications Commission’s (FCC)

Rural Health Care Program offers subsi- teleradiology, telepathology, ECG interpreta-
dies to assist rural health care professionals tion, tele-ultrasound, and echocardiography) Ironically, at
secure telecommunications and broadband the services are reimbursed as if they were the same time
services. 34 In 2014, the FCC established the offered directly. 42
Connect2HealthFCC Task Force to “consider
the federal
ways to accelerate the adoption of health care government
technologies by leveraging broadband and BARRIERS TO INTRASTATE subsidizes
other next-gen communications services.” 35 TELEMEDICINE telemedicine,
The Federal Telemedicine Working Group Ironically, at the same time the federal
(FedTel) includes representatives from federal government subsidizes telemedicine, state state
agencies that are involved in promoting tele- governments inhibit the practice by impos- governments
health. 36 The Patient Protection and Afford- ing barriers to market entry. Insofar as tele- inhibit the
able Care Act (Obamacare) includes several medicine represents a competitive threat to
provisions to promote telemedicine. 37 existing providers, it is not surprising that
practice by
The federal Health Resources and Services physicians would turn to state legislatures and imposing
Administration issues grants whose stated licensing boards to restrict the practice. Yet barriers
purpose is to promote medical-license porta- these restrictions harm patients by increasing
to market

bility across states. These grants were designed medical prices and reducing access to care.
to fund collaboration among state licensing Even when a physician and patient are in entry.
boards to minimize the burden of “require- the same state, government-imposed barri-
ments that . . . [a physician] be licensed in each ers prevent telemedicine from making medi-
state where he or she may provide telemedi- cal care better and more affordable. Some
cine services on a regular basis.” 38 As discussed states impose such burdensome rules on
below, grant recipients have not addressed the physician-patient encounters that the rules
regulatory burden in a substantive way. make telemedicine more difficult than in-
The federal government has slowly person encounters. 43 These rules include
expanded Medicare reimbursement for tele- informed consent requirements as well as
medicine services, adding home care and requirements that a telepresenter—a health
monitoring for chronic conditions via tele- professional—be present with the patient.
medicine to the set of covered procedures. 39 One example of an intrastate barrier
At present, Medicare only pays for telemedi- involved Teladoc, a company that provides
cine provided in rural areas. One concern is over-the-phone consultations with licensed
that telemedicine would make it too easy for physicians for less than the cost of a tradi-
enrollees to access care, and thereby increase tional office visit. 44 In 2011, the Texas Medical
Medicare spending. 40 Board (TMB)—a state regulatory body com-
At the state level, almost all states cover posed of members of the regulated industry
telemedicine through their Medicaid pro- (physicians)—notified Teladoc that its doctors
grams, although coverage varies across states must conduct an in-person physical exam
and many states follow Medicare’s policy before prescribing certain drugs through vir-
of limiting reimbursement to rural areas. tual encounters, and threatened disciplinary
A majority of the states require private action against Teladoc physicians who did
insurance companies to cover telemedicine not comply. Teladoc challenged the legality of
services. 41 When it comes to store-and- the rule in Texas courts. The TMB responded
forward telemedicine (such as when an image with an emergency rule limiting telemedicine,
is sent out for consultation), all states offer but a court injunction prevented it from tak-
Medicaid reimbursement. When the service ing effect. In May 2017, the Texas legislature
does not involve a direct interaction between resolved the impasse with legislation that made
a provider and patient (examples include Texas one of the last states to acknowledge that

a physician-patient relationship can be estab- their home state must therefore obtain and
Restricting lished without an in-person physical exam. The maintain medical licenses from every state
telemedicine legislation also made it clear that the TMB may in which their potential patients reside. Even
not impose a higher standard of care on tele- then, physicians can’t treat patients if the
imposes the medicine than is imposed on in-person care. 45 patient travels to a state where the physician
most harm on At one point, in 2016, Teladoc tried a differ- does not have a license. These requirements
low-income ent tactic, filing an antitrust lawsuit in the U.S. impose substantial time and money costs that

patients. District Court. Teladoc alleged the TMB’s keep medical prices artificially high by pre-
requirements were an effort to limit competi- venting entry and competition in the market
tion from telemedicine providers. The TMB for physician services.
claimed it enjoys state action immunity. State All states require physicians to meet the
action immunity is a legal defense that has same basic standards for obtaining a license: a
traditionally protected state medical boards degree from an accredited medical school, res-
from antitrust enforcement, even when idency training, a passing score on a standard-
actions to limit competition benefit board ized test, an acceptable malpractice history,
members. Yet the U.S. Supreme Court recent- and licensing fees. However, states complicate
ly ruled that state licensing boards composed the process with varying requirements, such as
of market participants, and not subject to additional testing or coursework. 48 Given the
active supervision by the state, enjoy no such complexities of applying for licenses in mul-
immunity. Citing that ruling, a federal district tiple states simultaneously, many physicians
court rejected the TMB’s motion to dismiss turn to private companies that assist with the
the antitrust complaint. Before the TMB process, including the Physician Licensing
withdrew its appeal of that district court rul- Service,, and the Florida
ing, the U.S. Federal Trade Commission, which Medical Licensing Service.
has sided with Teladoc, told the appeals court, Once licensed, physicians who wish to
“There is no evidence that any disinterested practice beyond the borders of their home
state official reviewed the TMB rules at issue state must comply with clinical practice rules
to determine whether they promote state and regulations that differ across states. 49
regulatory policy rather than TMB doctors’ This is another deterrent to entry. Because
private interests in excluding telehealth—and state medical licensing laws restrict cross-state
its lower prices—from the Texas market.” 46 practice, it is often easier for medical centers
or academic institutions in the U.S. to expand
internationally than to other states. 50
BARRIERS TO INTERSTATE Apart from generally suppressing tele-
TELEMEDICINE medicine, state-specific (and monopolistic)
Interstate telemedicine, for both serious licensing creates disparities. Large and densely
emergencies and simple office visits, would populated states are home to more specialists.
expand access to care, especially in smaller states. Patients in those states therefore have more
As it does in other industries, cross-state com- opportunities to consult with specialists via
petition would improve medical services and telemedicine than patients in smaller, less
reduce costs to consumers. Yet states impose densely populated states.
even greater barriers to telemedicine when a Restricting telemedicine imposes the
physician and patient are in different states. most harm on low-income patients. Wealthy
Each state requires any physician who pro- patients can get around the restrictions by
vides services to a patient in that state to obtain paying the artificially high prices for medical
a medical license from that state, regardless of care that persist in the absence of competi-
where the physician is located. 47 Physicians tion, or by traveling to the states or countries
who wish to practice beyond the borders of where the leading specialists practice. The

cost of barriers to market entry fall hardest on are reluctant to pull licenses and thus allow,
poor patients, the uninsured, and those who for example, physicians with drug and alco- The best
rely on state Medicaid programs, who do not hol problems to continue to practice before option for
have the means to travel to top specialists. 51 completing programs designed to deal with
their addictions. According to the nonprofit
consumers is
consumer advocacy group Public Citizen, state to eliminate
OPTIONS TO REDUCE medical licensing boards are underdisciplin- state
INTERSTATE BARRIERS ing physicians, such as by failing to sanction
licensing of

TO TELEMEDICINE many physicians with malpractice judgments
Proposals to reduce government-imposed against them. 57 clinicians.
barriers to telemedicine have circulated since The elimination of the state licensing
the late 1990s. 52 There are various policy boards would not end physician discipline.
options at the state and federal levels. 53 Medical malpractice claims brought by
patients would still move through the court
Eliminate Medical Licensing system. The offices of most state attorneys
The best option for consumers is to elimi- general have specialty groups that prosecute
nate state licensing of clinicians. The existing criminal behavior by physicians, just as they
barriers to telemedicine are just one example prosecute other criminal activity. 58 Providers,
of the problems created by medical licensing. 54 such as hospitals, insurance networks, and
In the simplest case, states would eliminate group practices, would continue their efforts
state medical boards and licensing of medical to deny privileges, block reimbursement, and
professionals entirely. dissociate with poor-performing physicians.
Eliminating government licensing of clini- Medical malpractice liability insurers would
cians would not compromise safety, because continue to work with their physician cus-
licensing does not promote safety. The lion’s tomers to improve the quality of care, and to
share of consumer protections that we can encourage safer care by charging higher pre-
observe comes from private actors, not state miums to, or imposing practice limitations on,
licensing boards. Hospitals, health insurers, problem physicians. 59
medical malpractice liability insurers, and
others evaluate the physicians they allow to Allow Medical Professionals to Practice
practice, reimburse, and indemnify. Unlike Telemedicine Nationwide on the
state licensing boards, these entities are liable Basis of Their Home-State License
if a patient suffers an injury due to their negli- If eliminating state licensing of medical pro-
gence or that of the physician. 55 fessionals is not currently feasible, a second-
Indeed, state licensing boards are not best option is to allow medical professionals to
benign actors. Their activities have a negative practice telemedicine in any state on the basis
impact on health care access and costs. Existing of their home-state license. This could come
barriers to telemedicine are but one example of about if each state passes legislation, or if the
how physicians use licensing rules to preserve federal government intervenes to define the
their market share and keep prices artificially location of the practice of medicine as that of
high by blocking competition and innovation. the provider.
Another example is how the physician lobby UNILATERAL STATE ACTION. Individual states
uses state licensing boards’ regulation of the could eliminate barriers to interstate medi-
scopes of practice of advanced practice nurses cal practice by allowing physicians who are
to inhibit the growth of retail clinics and other licensed in other states to offer telemedicine
lower-cost ways of delivering care. 56 services in their state. 60 Medical professionals
If anything, licensing gives patients a would be subject to the rules and regulations
false sense of security. State medical boards of their home state.

In 2016, the Florida House of Represen- quality certification, has precedent in cur-
Congress tatives approved a bill (HB 7087) allowing rent law. Since 2011, the Centers for Medicare
could enact physicians licensed in other states to offer and Medicaid Services (CMS) has allowed
telemedicine services in Florida. The original hospitals interacting with physicians located
a federal law language of the bill required out-of-state phy- elsewhere via telemedicine to rely on the
that would sicians to register in Florida and included pro- credentialing and privileging of the hospital at
treat patients hibitions against opening an office in Florida which the telemedicine doctor is located. 63
who receive or treating Florida residents in person without The Veterans Administration, U.S. military,
a Florida license. Had this provision become and Public Health Service already allow physi-
telemedicine law, Florida would have been the first state to cians to practice in any of their facilities on the
services from allow its residents full access to interstate tele- basis of the physician’s home-state license. 64
out-of-state medicine services. The Florida Senate elimi- And there is support in Congress for a bill that
nated the provision. 61 would allow physicians to provide telemedi-
physicians like FEDERAL ACTION TO DEFINE THE LOCATION cine services to Medicare recipients under the
patients who OF CARE. Proponents of congressional action license of their home state. 65
travel across argue that some form of federal action is nec- One concern about defining the location
state lines essary, at least for telemedicine, because states of care as that of the physician is that states
have shown an unwillingness to resolve the bar- might compete for licensing fees by lowering
for medical

riers to interstate practice. Existing state laws, patient protections. States could face incen-
care. as well as the Interstate Medical Licensure tives to reduce licensing requirements or
Compact (discussed below), define the locus malpractice rules below what is necessary to
of care as that of the patient, and therefore protect patients. At the same time, however,
require the physician to obtain a license from interstate competition via telemedicine is
the state where the patient is located. A change likely to reduce the value of a license in a state
in the definition of the locus of care to that of known for weak protections.
the physician would eliminate the need for phy- Indeed, like out-of-state hospital creden-
sicians to obtain licenses from any state other tialing and privileging, single-state licensing
than the state(s) where they already practice. can make it easier to monitor and discipline
Congress could enact a federal law that, for physicians. A single-state licensing board in
the purposes of telemedicine services, defines the home state of the physician can more eas-
the location of care as that of the physician. ily compile complaints related to a physician’s
Such a change would treat patients who receive services and sanction errant physicians than
telemedicine services from out-of-state physi- multiple medical boards, each of which sees
cians like patients who travel across state lines only pieces of the puzzle.
for medical care. 62 MUTUAL RECOGNITION. A third option to deal
This simple action would sweep away the with licensing roadblocks to telemedicine is for
major barrier that licensing laws place in the states to set up mutual-recognition arrange-
way of interstate telemedicine. Physicians ments with other states. A few states allow
would still need to keep up with changes in physicians licensed in nearby states to prac-
licensing requirements in their own states, tice without a separate license. The National
but would no longer bear the burden of track- Council of State Boards of Nursing’s Nurse
ing and complying with changes in licensing Licensure Compact and the newly introduced
requirements across multiple states. The costly Advanced Practice Registered Nurse Compact
and time-consuming process of maintaining are mutual-recognition agreements that allow
licenses in multiple states would no longer bar nurses to practice in any of the participating
entry into the market for telemedicine services. states on the basis of their home-state license. 66
This proposal, which at its core sim- Recognition agreements, such as the Nurse
ply allows patients to rely on out-of-state Licensure Compact, still require individual

practitioners to operate under the laws of the range from $200 to $1,000. Renewal fees run
various states in which they practice. This about $200 a year. Physicians must pay these A federal law
becomes a serious problem for multistate tele- fees in each state in which they maintain a changing the
providers. Changing the locus of the practice license. Any reform allowing physicians to
of medicine avoids this problem, and requires practice in additional states without obtaining
locus of care
only one legislature to act, rather than 50. licenses from those states would result in a loss to that of the
FEDERAL LICENSING. Since the late 1990s, of licensing-fee revenues. 69 The gains in health physician may
telemedicine advocates have called for federal care affordability would certainly dwarf those
be the most
licensing. 67 Options include a parallel system lost revenues. Nevertheless, states are unlikely
that licenses physicians only for telemedicine to support any reforms that reduce state rev- politically
(leaving state medical boards intact), or a system enues (e.g., eliminating licensing, recognizing feasible
that displaces state-based licensing entirely. other out-of-state or international licenses), or option for
Federal licensing would require the estab- to support federal licensing, which could ulti-
lishment of federal rules and federal agencies mately displace state licensing entirely.
to enforce them. Even if the federal govern- Physician groups will also tend to oppose licensing-
ment were to license physicians to practice pro-competitive reforms. 70 Anything that imposed
telemedicine only, it could add yet another tears down barriers to competition presents a
layer of administration and costs. And just threat to physicians’ existing revenue streams.
to tele-

as physicians have used state licensing to Compared to state-level reforms, however,
limit competition, incumbents could use a federal legislation changing the locus of care medicine.
national licensing apparatus to limit, rather could engender less opposition from physi-
than expand, access to health care. 68 Indeed, cians. When a state allows competition from
the creation of a new federal (tele)medical out-of-state physicians, in-state physicians
licensing agency would create a permanent, see only the downside—greater competition.
taxpayer-funded agency that advocates for The market for their services does not expand.
ever more restrictive regulations and ever Even in a mutual-recognition agreement, the
higher barriers to market entry. market for their services expands to just one,
or maybe a few, states. Federal legislation
Feasibility changing the locus of care would present a
A federal law changing the locus of care to much greater upside for physicians—the mar-
that of the physician may be the most politically ket for their services would expand to all 50
feasible option for removing licensing-imposed states. And unlike federal licensing, it would
barriers to telemedicine. Unlike repealing not require physicians to clear additional hur-
licensing, state laws recognizing out-of-state dles. These factors would minimize opposition
licenses, and mutual-recognition agreements, to liberalization among incumbent physicians.
it would require only one (federal) law, rather
than 50 separate state laws. Unlike federal Policy-Related Legal Issues
licensing, it would require no new federal agen- There are two legal issues raised by these
cies or spending, and create no new barriers to policy proposals. The first has to do with the
telemedicine. It would also build on existing constitutionality of federal intervention. The
efforts in Medicare, the Veterans Administra- second deals with the question of which courts
tion, and elsewhere to recognize out-of-state would have jurisdiction and which state’s rules
licenses. It is also less likely to engender signifi- would apply in disputes where patients and
cant opposition than other approaches. physicians live in different states.
Licensing fees are a significant source of THE CONSTITUTIONALITY OF FEDERAL INTER-
state revenue. There are about one million VENTION. Licensing and regulating the prac-
doctors in the United States, and each pays tice of medicine has traditionally been a power
periodic licensing fees. Initial licensing fees exercised by states. The Tenth Amendment

to the U.S. Constitution provides, “The pow- licensure, nor eliminates barriers to telemedi-
The Interstate ers not delegated to the United States by the cine. Under the Compact, physicians must
Medical Constitution”—such as licensing—“nor pro- still obtain a license from every state in which
hibited by it to the States, are reserved to their patients might find themselves needing
Licensure the States respectively, or to the people.” 71 medical care. The Compact only attempts to
Compact Some may therefore conclude that the federal expedite the process of applying for multiple,
neither government has no authority to override state nonportable licenses. Licenses are no more
creates laws defining the locus of care for purposes of interstate or portable under the Compact
regulating medicine. than without it. To call it an Interstate Medi-
portable or Nevertheless, the U.S. Constitution does cal Licensing Compact is false advertising. 78
interstate delegate to Congress the power “to regulate In states that adopt the Compact, med-
licensure nor Commerce . . . among the several States.”72 ical-specialty-board certified (or eligible)
This encompasses the power to tear down physicians with clean records can apply for
eliminates trade barriers between the states, which state licenses from other Compact states through
barriers restrictions on telemedicine have undoubtedly their home state. 79 Once the home state
to tele- become. Existing state laws defining the locus has completed a criminal background check

medicine. of care as that of the patient—that is, the non- and verified a physician’s qualifications, the
regulated entity—are clearly a barrier to trade state sends an “attestation of eligibility” to
with licensed physicians. 73 Surveying the legal the Interstate Medical Licensure Compact
case history, including recent cases related to Commission. 80 The physician then sends
the Affordable Care Act, Bill Marino, Roshen the Commission the licensing fees required
Prasad, and Amar Gupta argue that telemedi- by each Compact state selected by the phy-
cine licensure reform would overcome any sician, and the Commission forwards these
constitutional challenges. 74 fees and information about the physician
MEDICAL MALPRACTICE JURISDICTION. Which to other Compact member states. In addi-
state has jurisdiction in a malpractice case where tion, physicians pay $700 to the Compact
an out-of-state telemedicine provider allegedly Commission, of which $400 remains with
injures a patient? To date, courts have had little Commission and $300 is forwarded to the
opportunity to address this issue with regard home state for its work in vetting the appli-
to telemedicine because few malpractice cases cant. At that point, the Compact states issue
so far have involved telemedicine, and most of the applicant expedited licenses (because the
those have been about internet prescribing. 75 physician’s home state has already done most
Nevertheless, the “long-arm” revolution of the work). Although a number of states
in tort law frequently allows patients to file have joined the compact, issues related to
malpractice claims in their own state against the required Federal Bureau of Investigation
out-of-state providers, even if the patient trav- background check are derailing efforts to
eled to another state to receive care from the move forward. 81
provider. 76 The case for such jurisdiction is The legislation passed by the Interstate
particularly strong with telemedicine, where Medical Licensure Compact’s member states
any injury the patient suffers would undoubt- includes two key components: “expedited”
edly occur in the patient’s home state. 77 licensing and a physician database that would
facilitate the sharing of information about phy-
sician discipline and ongoing investigations
THE INTERSTATE MEDICAL among member states. 82 However, comments
LICENSURE COMPACT by Dr. Jon Thomas, chair of the Interstate
One supposed attempt at reform, the so- Medical Licensure Commission, challenge the
called Interstate Medical Licensure Com- assumption that the process of securing mul-
pact, neither creates portable or interstate tiple licenses can be “expedited.” He explained

that Minnesota has modified its state’s process practice” that fails to address “workforce needs
so that, if there are no issues that trigger an eval- and improve access to health care services,” Under the
uation (IMLC-eligible physicians would not yet the Compact keeps the duplicative licens- Compact, the
trigger an evaluation), a license can be issued ing process intact. 87 Indeed, the Federation of
within a week. State Medical Boards has received additional
Federation of
The physician database, the part of the federal funds to “implement the administra- State Medical
Compact which was, ostensibly, to address tive and technical infrastructure of the new Boards’
the difficulty of board oversight with multiple Interstate Medical Licensure Compact” and to
states licensing the same physicians, is nowhere “support educational outreach to expand par-
near ready. The IMLC Commission started ticipation in the Compact by other states.” 88 boards
taking applications for licenses in April 2017 Such federal subsidies raise other impor- continue
but, according to Dr. Thomas, the Commission tant issues. First, if federal subsidies allow the to hold
does not have the funds and is “just starting to Compact to underprice private companies
talk about” the database. Katherine Thomas, that assist physicians in securing multiple
President of the Board of Directors of the licenses, the result would be to replace the over market
National Council of State Boards of Nursing, existing process with a more expensive, entry in their
noted that establishing a database “is a big chal- taxpayer-subsidized one. Second, if fed-

lenge” and is expensive. And the Nurse database eral subsidies to the Compact Commission
is mainly to “flag people who are under signifi- make that process for applying for multiple states.
cant investigation for significant issues so if licenses more attractive than seeking private
they move to another state to seek a geographic services, the requirement that physicians
cure we have a way to know that.” 83   be certified by a medical-specialty board
The National Practitioner Data Base effectively confers a government-created
(NPDB) already tracks physicians for that competitive advantage on the American
purpose, in an attempt to trace individuals Board of Medical Specialties and its member
who have been sanctioned by a state board, boards. 89 To the extent the Compact grants
had their hospital privileges revoked, have a medical-specialty boards an advantage that
history of medical malpractice cases, etc. To increases their power, the Compact would
add value, the IMLC database would have to seem to contribute to the cartelization of
capture information that has not yet led to medicine rather than disrupt it through
reportable sanctions and member states would innovations such as telemedicine.
have to report promptly (a problem with the In all, the Interstate Medical Licensure
NPDB) and follow up promptly. 84 Compact does not disrupt the status quo so
By contrast, changing the locus of care to much as preserve it. It protects the interests
that of the physician would create a single of the state medical boards. Under the Com-
location for complaints and information about pact, the Federation of State Medical Boards’
physicians without creating a new reporting member boards continue to hold monopolies
requirement for states. over market entry in their respective states.
The Compact has already received sig- The federation stands to gain financially as the
nificant federal funding. 85 The Federation Interstate Medical Licensure Compact makes
of State Medical Boards received funding use of the Federation’s Uniform Application.
for the Compact from the federal Health The Compact also funnels applicants through
Resources and Services Administration’s the Federation Credential Verification System,
Licensure Portability Grant Program. 86 although multiple private credential verifica-
Paradoxically, the License Portability Grant tion companies exist. The Compact makes
Program’s literature specifically decries the it seem as if action has been taken, quieting
existing duplicative licensing process as an critics who have called for federal licensure to
“unnecessary licensure barrier to cross-state promote interstate telemedicine.

CONCLUSION information about disciplinary actions against
The most Aside from the ideal of eliminating govern- a physician in the state in which the physician
feasible ment licensing of clinicians, or the second-best is licensed.
option of relying on states to open their bor- The Interstate Medical Licensure Com-
option for ders to physicians licensed in other states, the pact does not solve anything. It does not create
expanding most feasible option for expanding telemedi- license portability. Physicians must still secure
telemedicine cine is for Congress to define the location of a license in every state in which their patients
is for the practice of telemedicine as that of the phy- live or wish to receive treatment. The Compact
protects the status quo—specifically the power
sician, treating digital patients like patients
Congress to who physically make a trip across state or of the state medical boards and the revenues
define the national borders to secure medical care. that flow to them from physicians who must
location of Under such a law, a physician would need seek multiple licenses to practice telemedicine.
only one license to engage in the practice of
the practice of telemedicine, and would be responsible for
telemedicine only one set of licensing rules—those of the NOTES
as that of the state in which the physician practices. Exist- 1. Regina Garcia Cano, “Telemedicine Gains In-

physician. ing telemedicine providers would be able to creasing Relevance in S.D.,” Argus Leader (Sioux
recruit physicians in greater numbers and to Falls), June 8, 2014,
provide higher-quality and lower-cost services story/news/2014/06/08/telemedicine-gains-
to far more patients. The ability of patients in increasing-relevance-sd/10193077/.
emergent situations or with rare illnesses to
obtain care from top specialists would expand 2. For a perspective on how to promote interna-
dramatically. New entrants into a national tional telemedicine, see Simon Lester, “Expand-
market for telemedicine would drive down ing Trade in Medical Care through Telemedi-
prices for both telemedicine and in-person cine,” Cato Institute Policy Analysis no. 769,
medical services. March 24, 2015,
Such a law would remove existing barriers org/files/pubs/pdf/pa769_2.pdf.
to telemedicine by allowing licensed physi-
cians to offer telemedical services in all states. 3. Shirley Svorny, “Medical Licensing: An Ob-
It would parallel the decision by the Centers stacle to Affordable, Quality Care,” Cato In-
for Medicare and Medicaid Services to allow stitute Policy Analysis no. 621, September 17,
hospitals interacting with physicians locat- 2008,
ed elsewhere via telemedicine to rely on the pubs/pdf/pa-621.pdf; and Shirley Svorny, “Could
credentialing and privileging of the hospital at Mandatory Caps on Medical Malpractice Dam-
which the telemedicine doctor is located, and ages Harm Consumers?” Cato Institute Policy
efforts by the Veterans Administration, U.S. Analysis no. 685, October 20, 2011, https://www.
armed forces, and the Public Health Service to
allow physicians to practice in any location on mandatory-caps-medical-malpractice-damages-
the basis of the physician’s home-state license. harm-consumers.
It would eliminate the costly efforts to secure
licenses in multiple states to practice telemedi- 4. News Service of Florida, “Telehealth Bill
cine. State medical boards would continue to Bounces Back to House,” March 7, 2016, http://
issue licenses, but a state’s licensing laws would
no longer constrain its residents from obtain- back-house#stream/0.
ing telemedicine services from providers in
other states. 5. Julia Boorstin, “Paging Dr. Robot: Telemedicine
A single-state licensing system would cre- a Game Changer, So-called Robot Doctors Are
ate a single repository of complaints and Allowing Patients in More Remote Areas to Get

Lifesaving Care,” NBC Nightly News, September web/20170311155437/

2, 2013, expert-care-research/telemedicine-virtual-care; and
news/52908303#52908303; and Judy Woodruff, Nancy Shute, “The Parkinson’s Doctor Will Video
“Telemedicine Puts a Doctor Virtually at Your Chat With You Now,” National Public Radio, June
Bedside,” PBS NewsHour, July 13, 2015, http:// 2011, parkinsons-doctor-will-video-chat-with-you-now.
12. Donald M. Hilty, Daphne C. Ferrer, Michelle
6., “‘Nighthawk’ Radiology Ser- Burke Parish, Barb Johnston, Edward J. Callahan,
vices Expand to Hospital Pharmacies: Could and Peter M. Yellowlees, “The Effectiveness of
Pathology Laboratories Be Next?” July 16, 2015, Telemental Health: A 2013 Review,” Telemedicine and E-Health 19, no. 6 (June 2013): 444–54.
ser vices-expand-to-hospital-pharmacies-
c o u l d - p a t h o l o g y - l a b o r a to r i e s - b e - n e x t- PMC3662387/.
13. Devon M. Herrick, “Convenient Care and
7. Partners TeleStroke Center, “What Is Telemedicine,” NCPA Policy Report no. 305, No-
TeleStroke?” vember 2007,
telestroke.aspx; and Michael Kulcsar, Siobhan
Gilchrist, and Mary G. George, “Improv- 14. Richard Wootton, “Twenty Years of Tele-
ing Stroke Outcomes in Rural Areas through medicine in Chronic Disease Management—
Telestroke Programs: An Examination of Barri- an Evidence Synthesis,” Journal of Telemedicine
ers, Facilitators, and State Policies,” Telemedicine and Telecare 18, no. 4 (2012): 211-20; Andrew
and e-Health 20, no. 1 (January 2014): 3–10. Broderick and Valerie Steinmetz, Centura Health
at Home: Home Telehealth as the Standard of Care.
8. D. E. Calcagni, C. A. Clyburn, G. Tomkins, G. Case Studies in Telehealth Adoption (New York:
R. Gilbert, T. J. Cramer, R. K. Lea, S. G. Ehnes, The Commonwealth Fund, January 2013),
and R. Zajtchuk, “Operation Joint Endeavor in
Bosnia: Telemedicine Systems and Case Reports,” files/publications/case-study/2013/jan/1655_
Telemedicine Journal 2, no. 3 (Fall 1996): 211–24, broderick_telehealth_adoption_centura_case_ study.pdf; and Center for Connected Health Pol-
icy, “Remote Patient Monitoring,” http://cchpca.
9. Shantanu Nundy, Jonathan J. Dick, Chia- org/remote-patient-monitoring.
Hung Chou, Robert S. Nocon, Marshall H.
Chin, and Monica E. Peek, “Mobile Phone 15. Neil Versel, “As School Nurses Disappear, Tele-
Diabetes Project Led to Improved Glycemic medicine Fills In the Gaps,” MedCity News, May
Control and Net Savings for Chicago Plan 18, 2016,
Participants,” Health Affairs 33, no. 2 (February nurses-telemedicine/?rf=1; Associated Press, “Av-
2014): 265–72. era to use Telemedicine in Sioux Falls Schools,”
Daily Republic (Mitchell, SD), November 12, 2014,
10. David C. Grabowski and James A. O’Malley,
“Use of Telemedicine Can Reduce Hospitaliza- use-telemedicine-sioux-falls-schools.
tions of Nursing Home Residents and Gener-
ate Savings for Medicare,” Health Affairs 33, no. 2 16. Bonnie Darves, “Telemedicine: Changing
(February 2014): 244–50. the Landscape of Rural Physician Practice,”
New England Journal of Medicine Career Center,
11. National Parkinson Foundation, “Telemedi- May 17, 2013,
cine and Virtual Care,” article/telemedicine-changing-the-landscape-

of-rural-physician-practice/; Rural Assistance Modern Healthcare, February 21, 2015, http://

Center, “Telehealth Use in Rural Healthcare,”
Federal Office of Rural Health Policy, Health MAGAZINE/302219977.
Resources and Services Administration, U.S.
Department of Health and Human Services, 20. Beth Pinsker, “Coming Soon to a Screen
May 8, 2014, Near You: Doctors,” Reuters, August 12, 2015,
telehealth; Boorstin, “Paging Dr. Robot”;
Kulcsar et al., “Improving Stroke Outcomes in telemedicine-idUSKCN0QH1S820150812.
Rural Areas through Telestroke Programs.”
21. UnitedHealthcare, “UnitedHealthcare Cov-
17. James Brooks, “Program Expands Southeast ers Virtual Care Physician Visits, Expanding
Scope,”, July 28, 2015, http:// Consumers’ Access to Affordable Health Care Options,” April 30, 2015, https://www.stage-app.
18. See, for example, American Well’s website visits.
at The American Well site
lists the services it offers through a question-and- 22. Anthony Brino, “More Insurers See Case for
answer format: “What conditions are appropri- Telemedicine,” Healthcare Payer News, August 7,
ate for an online [urgent care] doctor visit?” The 2014,
answer: “cough, sinus infection, sore throat, back news/more-insurers-see-case-telemedicine#.
pain, bronchitis, vomiting, diarrhea, sprains/ VhbI_vlViko. See LiveHealth Online, “Choose
strains, fever, pinkeye, cold and flu, skin condi- a State,”
tions, UTI, headache, influenza, rashes.” Then, availability.
“What conditions do our [online] therapists
treat?” The answer: “anger management, anxiety, 23. Jonah Comstock, “Survey: 9 in 10 Large
ADHD / ADD, depression, divorce, eating disor- Employers Will Offer Telehealth Next Year,”
ders, LGBT counseling, bereavement, postpar- MobiHealthNews, August 10, 2016, http://www.
tum depression, OCD, trauma/PTSD, couples
therapy, panic attacks, substance abuse, sleep employers-will-offer-telehealth-next-year.
disorders, stress and more.” Finally, as part of its
nutrition counseling services: “Here are some 24. Jonah Comstock, “Video Visits, Telemedi-
common concerns that can be addressed online: cine Today Are Like Retail Clinics Were in the
weight loss, digestive disorders, food allergies, 1990s,” MobiHealthNews, November 4, 2014,
gluten free diets, pregnancy diet, breastfeeding
tips, pediatric nutrition, high cholesterol, sports telemedicine-today-are-like-retail-clinics-were-
nutrition, vegetarian/vegan diets, vitamins and in-the-1990s/.
supplements, high blood pressure, diabetes, ges-
tational diabetes, paleo diet, meal planning.” 25. Dan Verel, “Pipeline RX Takes Telemedicine to
Hospital Pharmacies,” MedCity News, December
19. Kaiser Permanente, “Operationalizing Tele- 8, 2014,
medicine in Managed Care: Lessons from Kaiser rx-takes-telemedicine-hospital-pharmacies/.
Permanente, Half Day Course,” 2015 Annual
Meeting American Telemedicine Association, 26. Woodruff, “Telemedicine Puts a Doctor Vir-
May 3, 2015, tually at Your Bedside.”
care--lessons-fr; and Darius Tahir, “Innova- 27. American Telemedicine Association, Tele-
tions: Kaiser Tests Video Visits to Cut Waits,” medicine Case Studies, “Patient Profile: Te-

leneurology Provides Swift, Lifesaving Treat-

ment,” PMC4011485/.
37. Diane E. Hoffman and Virginia Rowthorn,
28. See the Teladoc website at https://www. “Legal Impediments to the Diffusion of Tele- medicine,” Journal of Health Care Law and Policy
14, no. 1 (2011): 7–8,
29. Laura Landro, “Clues to Better Health-
care from Old Malpractice Lawsuits,” Wall
Street Journal, May 9, 2016, 38. Health Resources and Services Administra-
articles/clues-to-better-health-care-from-old- tion, “Licensure, Licensure Portability,” http://
malpractice-lawsuits-1462813546. (no longer avail-
able online). The grant program “Funds state pro-
30. Svorny, “Could Mandatory Caps on Medical fessional licensing boards to work with licensing
Malpractice Damages Harm Consumers?” boards in other states to develop and implement
policies that reduce barriers to telemedicine and
31. Teladoc, “Teladoc Physician Credentialing,” other practices that are limited by requirements
January 2016, http://communications.teladoc. that physicians be licensed in each state where he or she
com/resources/Key-Differences-Employers. may provide telemedicine services on a regular basis.
pdf; Teladoc Securities and Exchange Commis- [italics added] This is particularly a problem for
sion Form 10-K for the year ended December physicians who are providing highly specialized
21, 2016, services around the country for rare conditions
CIK-0001477449/96d1a2e4-f16c-4827-b470- (e.g., genetic counseling).”
39. U.S. Department of Health and Human Ser-
32. American Telemedicine Association, “Telemed- vices, Centers for Medicare and Medicaid Ser-
icine Accreditation” http://www.americantelemed. vices, “Telehealth Services,”
org/main/ata-accreditation (viewed 8/30/2017). Outreach-and-Education/Medicare-Learning-
33. EfficientGov, “USDA Awards $20M for TelehealthSrvcsfctsht.pdf; Eric Wicklund, “CMS
Telehealth Programs,” January 13, 2015, https:// Boosts Telehealth in 2015 Physician Pay Sched- ule,” mHealthNews, November 3, 2014, http://
telehealth-2015-physician-pay-schedule; and Aditi
34. Federal Communications Commission, “Ru- Pai, “More Telehealth Makes the Cut for Medicare
ral Health Care Program,” Coverage Next Year,” MobiHealthNews, Novem-
encyclopedia/rural-health-care. ber 4, 2014,
35. Federal Communications Commission, coverage-next-year/.
“FCC Chairman Announces New CON-
NECT2HEALTHCC Taskforce,” March 4, 2014, 40. Phil Galewitz, “Cost Fears Keep Medicare Telemedicine from Expanding,” Daily Herald
announces-new-connect2health-task-force. (Chicago), June 28, 2015, http://www.dailyherald.
com/article/20150628/business/150629224/. Most
36. Charles R. Doarn, et al, “Federal Efforts people would not find this an acceptable way to
to Define and Advance Telehealth—A Work in ration health care. See also, Rachel Z. Arndt, “Sen-
Progress,” Telemedicine Journal and E-Health,” ate Bill Would Let Medicare Test Telehealth Ex-
Vol. 20, No. 5, pp. 409-418, May 1, 2014, pansion,” Modern Healthcare, April 3, 2017, http://
16 Texas Medical Board et al., September 14, 2016,

41. Center for Connected Health Policy, “State texas-medical-board-et-al/teladoc_doj-ftc_
Telehealth Laws and Reimbursement Policies: A amicus_brief.pdf.
Comprehensive Scan of the 50 States and District
of Columbia,” The National Telehealth Policy Re- 47. Most states allow physician-to-physician
source Center, April 2017, consultation across state borders, but that excep-
sites/default/files/resources/50%20STATE%20 tion has limitations and is not sufficient to allow
PDF%20FILE%20APRIL%202017%20 the general practice of telemedicine. A few states
FINAL%20PASSWORD%20PROTECT.pdf. have reciprocal agreements with neighboring
states that allow doctors licensed in each state to
42. U.S. Department of Veteran Affairs, VA Tele- practice in the other. See Thomas and Capistrant,
health Services, “Store-and-Forward Telehealth,” State Telemedicine Gaps Analysis.”; American Tele-
medicine Association, “Store-and-Forward,” No- 48. See, for example, Robert Kocher, “Doc-
vember 7, 2013. tors without State Borders: Practicing Across
State Lines,” Health Affairs (blog), February 18,
43. Latoya Thomas and Gary Capistrant, State 2014,
Telemedicine Gaps Analysis, Physician Practice doctors-without-state-borders-practicing-
Standards and Licensure (Washington: American across-state-lines/.
Telemedicine Association, 2015),
resources/downloads/50-state-telemedicine- 49. Thomas and Capistrant, State Telemedicine
gaps-analysis-physician-practice-standards- Gaps Analysis.” In an interview with Kofi Jones,
licensure.pdf. vice president of public relations and government
affairs at American Well, Jones said that she has
44. Edgar Walters, “Teladoc Scores Victory in “30 binders in her office filled with state-by-state
Clash With Medical Board,” Texas Tribune, May regulations and legislation.” See Mattie Quinn,
30, 2015, “Telemedicine Advances Faster than States Can
teladoc-scores-early-victory-against-medical- Keep Up,” Governing, February 2016, http://www.
board/; Dionne Lomax and Kate Stewart, “In-
junction Blocks Implementation of Texas Tele- gov-telemedicine-state-laws.html.
medicine Regulations,” National Law Review
Health Law and Policy Matters (blog), June 4, 2015, 50. Beth Kutscher, “The Long Reach of Medi- cine,” Modern Healthcare, October 20, 2012, http://
regulations. MAGAZINE/310209954.

45. Eric Wicklund, “With New Texas Law, 51. Sara Rosenbaum, “Perspective: Medicaid
Telemedicine Passes an Important Mile- Payments and Access to Care,” New England Jour-
stone,” mHealth Intellegence, May 31, 2017, http:// nal of Medicine 371, no. 25 (December 18, 2014): 2345–47,
texas-law-telemedicine-passes-an-important- NEJMp1412488.
52. See, for example, Raymond W. Pong and
46. Federal Trade Commission, “Brief for the John C. Hogenbirk, “Licensing Physicians for
United States and the Federal Trade Commission Telehealth Practice: Issues and Policy Options,”
as Amici Curiae,” in Teladoc, Incorporated, et al., v. Health Law Review 8, No. 1 (1999): 3–14, https://
17 studies since 1999. See Public Citizen, “State

Licensing_Physicians_for_Telehealth_Practice_ Medical Board Disciplinary Actions,” https://web.
53. Mary K. Wakefield, “Telehealth Licensure Re- See also, Sidney M. Wolfe, Cynthia Williams,
port, Special Report to the Senate Appropriations and Alex Zaslow, “Public Citizen’s Health
Committee,” Health Resources and Services Research Group Ranking of the Rate of State
Administration, U.S. Department of Health Medical Boards’ Serious Disciplinary Actions,
and Human Services, 2010, https://web.archive. 2009–2011,” May 17, 2012,
org/web/20131204111506/ documents/2034.pdf; Public Citizen, “New Public
healthit/telehealth/licenserpt10.pdf. Citizen Study Questions Ability of State Medical
Boards to Protect Patients from Dangerous
54. As I have argued elsewhere, consumers would Doctors,” March 15, 2011,
be best served were states to eliminate medical pressroom/pressroomredirect.cfm?ID=3294; Alan
boards and the licensing of medical profession- Levine, Robert Oshel, and Sidney Wolfe, “State
als entirely. See, for example, Svorny, “Medical Medical Boards Fail to Discipline Doctors with
Licensing: An Obstacle to Affordable, Quality Hospital Actions against Them,” March 2011,
Care”; “End State Licensing of Physicians,” The (in this
Hill, August 7, 2015, case, the actual physician discipline came from
congress-blog/healthcare/250457-end-state- hospitals); and Rachel Rabkin Peachman, “What
licensing-of-physicians; and “Should We Recon- You Don’t Know About Your Doctor Could Hurt
sider Licensing Physicians?” Contemporary Policy You,” Consumer Reports, April 20, 2016, http://www.
Issues 10, no. 1 (1992): 31–38.
55. Many entities use credential verification or- could-hurt-you/index.htm.
ganizations (CVOs), such as McKesson, which
lists the services it provides on its website. See 58. In 2013, troubled by the failure of the Medi-
McKesson, “Medical Credentials Verification cal Board of California to discipline physicians,
Organization (CVO),” http://www.mckesson. California legislators proposed shifting the
com/population-health-management/solutions/ Board’s disciplinary function to the Office of the
credentials-verification-organization-cvo/. The Attorney General. See California Healthline Daily
(private) National Center for Quality Assur- Edition, “Bill Would Strip Medical Board of Power
ance accredits CVOs. See National Center for to Investigate Physicians,” April 23, 2013, https://
Quality Assurance, “Credential Verification
Organization Certification,” August 31, 2015, bill-would-strip-medical-board-of-power-to- investigate-physicians/.
59. Svorny, “Could Mandatory Caps on Medical
56. Joanne Spetz, Stephen T. Parente, Robert J. Malpractice Damages Harm Consumers?”
Town, and Dawn Bazarko, “Scope-of-Practice
Laws for Nurse Practitioners Limit Cost Savings 60. Although it often said that the European
That Can Be Achieved in Retail Clinics,” Health Af- Union has adopted this approach, it is not that
fairs. 32, no. 11 (November 2013): 1977–84, https:// simple. Automatic recognition of qualifications is not the same as being licensed to practice. See European Union, “Modernization of the Pro-
abstract. fessional Qualifications Directive—Frequently
Asked Questions,” October 9, 2013, http://europa.
57. Public Citizen’s website includes links to eu/rapid/press-release_MEMO-13-867_en.htm;

and Bettina Engelmann, “Recognition Procedures sure and Scope of Practice,” http://www.
for Foreign-trained Doctors in Germany,” presen-
tation at the International Workshop on Practices licensure-and-scope-practice.
for Recognizing Qualifications of Migrant Health
Professionals,” Hamburg, February 2009, http:// 65. Terry, “Interstate Licensing Bill for Tele- medicine Gathers Support.”
66. National Council of State Boards of Nurs-
61. Lynne Jeter, “Florida Passes Telehealth Leg- ing, “Licensure Compacts,” https://www.ncsbn.
islation,” Orlando Medical News, April 11, 2016, org/compacts.htm.
telehealth-legislation-cms-358. 67. See, for example, Elizabeth Joy Matak,
“Telemedicine: Medical Treatment via Telecom-
62. See, for example, Pong and Hogenbirk, “Li- munications Will Save Lives, but Can Congress
censing Physicians for Telehealth Practice: Issues Answer the Call? Federal Preemption of State
and Policy Options”; Brian Darer, “Telemedicine: Licensure Requirements under Congressio-
A State-Based Answer to Health Care in America,” nal Commerce Clause Authority and Spending
Virginia Journal of Law and Technology 3, no. 4 (Spring Power,” Vermont Law Review 22, no. 1 (Fall 1997):
1998), 231–55.
1&doctype=cite&docid=3+Va.+J.L.+%26+Tech.+4 68. Svorny, “Medical Licensing: An Obstacle to
&srctype=smi&srcid=3B15&key=7396623107b977 Affordable, Quality Care.”
b9fa9e0afef4e0b3e6; and Jane Orient, “Letter to
U.S. Senate: Oppose Interstate Medical Licensing 69. Jonathan D. Linkous, “Legal Impediments
Compact,” American Association of Physicians and to Telemedicine State Licensure,” statement at
Surgeons, January 26, 2015, Roundtable on Legal Impediments to Telemedi-
letter-to-u-s-senate-oppose-interstate-medical- cine, Law and Health Care Program, University of
licensing-compact/. Gary Capistrant, Chief Policy Maryland School of Law, April 16, 2010, (available
Officer of the American Telemedicine Association, from author). Some boards are funded directly
was quoted as saying: “What the ATA wants . . . is for by physician fees. In other states, fee revenues
the regulations of the state where the physician is go to the state general fund and annual board
located to govern his or her use of telehealth. Medi- funding is set as part of the state budgetary pro-
cine is where the provider is. Where the patient is is cess. See Shirley Svorny, “State Medical Boards:
not where the practice of medicine occurs.” See Ken Institutional Structure and Board Policies,”
Terry, “Interstate Licensing Bill for Telemedicine Federation Bulletin 84, no. 2 (1997): 27–32, http://
Gathers Support,”, August 18, 2015, StateMedicalBoards_1997.pdf.

63. Department of Health and Human Services, 70. Shirley Svorny, “Licensing Doctors: Do Econo-
Centers for Medicare and Medicaid Services, mists Agree? Econ Journal Watch 1, no. 2 (August
“Medicare and Medicaid Programs: Changes Af- 2004): 279–305,
fecting Hospital and Critical Access Hospital publications/SvornyDoEconomistsAugust2004.
Conditions of Participation: Telemedicine Cre- pdf; and David Hyman and Shirley Svorny, “If Pro-
dentialing and Privileging,” Federal Register 76, no. fessions Are Just ‘Cartels by another Name,’ What
87, pp. 25550–65, May 5, 2011, Should We Do about It?” University of Pennsylva-
fdsys/pkg/FR-2011-05-05/html/2011-10875.htm. nia Law Review Online 163, no. 1, (2014): 101–21,
64. Telehealth Resource Centers, “Licen- cgi?article=1137&context=penn_law_review_online.

71. U.S. Constitution, Tenth Amendment. Not Settled Issues,” ABA Health eSource 7, no. 10
(June 2011),
72. U.S. Constitution, Article 1, Section 8. newsletter/publications/aba_health_esource_
73. See Matak, “Telemedicine: Medical Treat- where he cites cases where injured patients have
ment via Telecommunications Will Save Lives, successfully sued out-of-state providers, but notes
but Can Congress Answer the Call?”; Lars Noah, that this is a developing area of law.
“Ambivalent Commitments to Federalism in
Controlling the Practice of Medicine,” Kansas 78. The framers of the Compact chose two web
Law Review 53, issue 1 (2004): 149–94; Sarah E. addresses, and licenseport-
Born, “Telemedicine in Massachusetts: A Better, even though license portability is not a
Way to Regulate,” New England Law Review 42, component of the Compact. Perhaps as a result of
issue 1 (2007):194–224; Amar Gupta and Deth criticism, by 2017, the web pages, licenseportabil-
Sao, “The Constitutionality of Current Legal and, were dropped
Barriers to Telemedicine in the United States: in favor of, and all references to
Analysis and Future Directions of Its Relation- portability are gone. Original documents refer to
ship to National and International Health Care portability. For example, although the webpage,
Reform,” Health Matrix: Journal of Law-Medicine, has been shuttered, the link
21, no. 2 (2011): 385–442. to this document remains (as of July 9, 2017): http://
74. “Congress can confidently pursue telemedi- Medical-Licensure-Compact-(FINAL).pdf. An
cine licensure reform knowing that it will over- earlier version of the website described the Com-
come any constitutional challenges and find se- pact as “an expedited licensure process for eligible
cure support in the Commerce Clause, Necessary physicians that improves license portability and
and Proper Clause, or Congress’ power to spend increases patient access to care” [italics added.].
conditionally on the general welfare.” Bill Marino, See Shirley Svorny, “Interstate Medical Licensure
Roshen Prasad, and Amar Gupta, “A Case for Fed- Compact Won’t Help,” Clarion-Ledger (Jackson,
eral Regulation of Telemedicine in the Wake of MS), February 27, 2016, http://www.clarionledger.
the Affordable Care Act,” Columbia Science and com/stor y/opinion/columnists/2016/02/26/
Technology Law Review 16 (May 17, 2015): 274–346. svorny-interstate-medical-licensure-compact-
wont-help/80998064/; and Shirley Svorny, “Ted
75. Virginia Rowthorn, “Legal Impediments Cruz Should Make the Case for Telemedicine,”
to the Diffusion of Telemedicine,” Journal of Time, February 9, 2016,
Health Care Law and Policy 14, No. 1 (2011): 1–53, ted-cruz-telemedicine/. On July 2, 2016, only one statement remained referencing portability: Fre-
viewcontent.cgi?article=2194&context=fac_pubs. quently Asked Questions: “How will the Com-
mission be funded? How much will it cost?” The
76. See Walter Olson, The Litigation Explo- answer: “The Compact Commission is enabled to
sion (New York: Truman Talley Books-Dutton, seek grants and secure outside funding, through
1991), ch. 9, private grants, or federal appropriations in sup-
tle_chap9.pdf; and Vedder, Price, Kaufman port of license portability.” This statement no
& Kammholz, P.C., “Long-Arm Statues: A longer appears on the IMLCC webpage, but it ap-
Fifty-State Survey,” 2003, http://euro.ecom. pears on the webpage of the Alaska State Legisla- -732/Jurisdiction/ ture,
LongArmSurvey.pdf. asp?session=29&docid=29238, and elsewhere.
See: Thomas Sullivan, “Interstate Medical Licen-
77. See Charles M. Key, “Personal Jurisdiction sure Compact—Expands to 17 States,” Policy and
and Choice of Law in Interstate Medical Practice Medicine, June 24, 2016, http://www.policymed.

com/2016/06/interstate-medical-licensure- 85. Previously, the Federation of State Medical

compact-expands-to-17-states.html. Boards’ “Interstate Medical Licensure Compact
FAQ” on the now defunct web page, http://www.
79. Physicians may be “board eligible” for five, said “Under the
to seven years (depending on the specialty) after terms of the proposed Compact, the Commission
they complete training but before they achieve may assess processing fees [on physicians] for ex-
initial certification. See ABMS, “ABMS Board Eli- pedited licensure, ultimately off-setting any burden
gibility Policy: Policy and FAQs,” September 30, on the member states. Additionally, the Compact
2014, Commission is enabled to seek grants and secure
board-eligibility/. Physicians who do not meet outside funding, through private grants, or federal
the Compact standards may still apply the tra- appropriations in support of license portability.”
ditional way to multiple boards. See Federation
of State Medical Boards, “Model Language, In- 86. The Federation of State Medical Boards re-
terstate Medical Licensure Compact,” http:// ceived three grants from the Health Resources Service Administration; the first was in 2006. See:
Medical-Licensure-Compact-(FINAL).pdf. Federation of State Medical Licensing Boards,
“Federation of State Medical Boards Receives
80. A summary of the Interstate Medical Licen- Grant to Facilitate Medical Licensure Portability,”
sure Compact process appears on the American September 13, 2012,
Academy of Pediatrics’ website. See American Default/PDF/Publications/nr-lp-grant.pdf.
Academy of Pediatrics, “Advocacy Action Guide
for AAP Chapters,” 87. U.S. Department of Health and Human Ser-
advocacy-and-policy/state-advocacy/Documents/ vices, “Licensure Portability Grant Program,”
Interstate%20Medical%20Licensure%20 HRSA-15-138,
Compact-Advocacy%20Action%20Guide%20 programopportunities/fundingopportunities/?
for%20AAP%20Chapters.pdf. id=91349861-3c0a-4776-b9d2-77dd77f46ed0.

81. For current state status, see: Interstate Medical 88. In June 2016, the Federation of State Medical
Licensure Compact, “The IMLC,” Boards announced a grant from the U.S. Health
Resources and Services Administration to “help
82. Currently the IMLCC webpage says: “. . . the the Compact become operational and . . . [to]
Compact strengthens public protection by en- support educational outreach to expand par-
hancing the ability of states to share investigative ticipation in the Compact by other states.” The
and disciplinary information.” See “Facts about irony is that the announcement says, “The Com-
the IMLCC,” Interstate Medical Licensure pact is expected to expand access to health care,
Compact, especially to those in rural and underserved ar-
imlcc/. eas of the country, and facilitate the use of tele-
medicine technologies in the delivery of health
83. Jon Thomas and Katherine Thomas, Federal care.” Without license portability, and with only
Trade Commission Economic Liberty Task Force a potentially costly plan that may or may not ex-
Roundtable “Streamlining Licensing across State pedite the initial licensure process, this expec-
Lines: Initiatives to Enhance Occupational Li- tation makes no sense. See Federation of State
cense Portability,” July 27, 2017. Medical Boards, “Federal Grant Awarded to
Support State Medical Boards in Implementing
84. U.S. Department of Health and Human Ser- Interstate Medical Licensure Compact,” June
vice, Health Resources and Services Administra- 17, 2016,
tion, “NPDB Timeline,” http://www.npdb.hrsa. PDF/Publications/Compact_HRSA_Grant_
gov/topNavigation/timeline.jsp. June2016.pdf.

89. This concern has been raised by the Associa- AAPS, “there is near unanimity that MOC’s only
tion of American Physicians and Surgeons mul- effect is to drain physicians’ time and money.”
tiple times. The organization’s main concern is AAPS, “Letter to U.S. Senate: oppose Interstate
that it will cement specialty-board Maintenance Medical Licensing Compact,” January 26, 2015,
of Certification (MOC) programs they deem
to be “of minimal or no value.” According to the interstate-medical-licensing-compact/.

Cost of Service Regulation in U.S. Health Care: Minimum Medical Loss Ratios,
by Steve Cicala, Ethan M. J. Lieber, and Victoria Marone, Research Briefs in Economic
Policy no. 86 (October 4, 2017)

Fresh Thinking on Occupational Licensing by Ilya Shapiro, Cato@Liberty (August 3,


Protecting Free Speech in Medicine by Christina Sandefur, Regulation 40, no. 2

(Summer 2017)

Should Government Subsidize and Regulate Electronic Health Records? by

Michael L. Marlow, Regulation 40, no. 2 (Summer 2017)

Was the First Public Health Campaign Successful? The Tuberculosis Movement
and Its Effect on Mortality by D. Mark Anderson, Kerwin Kofi Charles, Claudio Las
Heras Olivares, and Daniel I. Rees, Cato Institute Research Briefs in Economic Policy
no. 76 (May 17, 2017)

Health Care Regulation by Michael F. Cannon, in Cato Handbook for Policymakers, 8th
ed., chap. 35, Cato Institute (2017)

The “Troubles” with Pharmacy Benefit Managers by Thomas A. Hemphill,

Regulation 40, no. 1 (Spring 2017)

The FDA’s Dr. Nos by John J. Cohrssen and Henry I. Miller, Regulation 39, no. 4
(Winter 2016/2017)

Side Effects and Complications: The Economic Consequences of Health Care

Reform by Michael F. Cannon, Cato Journal 36, no. 3 (Fall 2016)

Menu Mandates and Obesity: A Futile Effort by Aaron Yelowitz, Cato Institute
Policy Analysis no. 789 (April 13, 2016)

Asymmetric Information and Medical Licensure by Shirley Svorny, Cato Unbound

(April 10, 2015)

Beyond Medical Licensure by Shirley Svorny, Regulation 38, no. 1 (Spring 2015)

Expanding Trade in Medical Care through Telemedicine by Simon Lester, Cato

Institute Policy Analysis no. 769 (March 24, 2015)

Do Doctors Practice Defensive Medicine? Revisited by Myungho Paik, Bernard

Black, and David A. Hyman, Cato Institute Research Briefs in Economic Policy no. 12
(October 15, 2014)
Is State “Right to Try” Legislation Misguided Policy? by Thomas A. Hemphill,
Regulation 37, no. 3 (Fall 2014)

Who Pays for Public Employee Health Costs? by Jeffrey Clemens and David M.
Cutler, Cato Institute Research Briefs in Economic Policy no. 6 (July 23, 2014)

Replacing Obamacare: The Cato Institute on Health Care Reform edited by

Michael F. Cannon and Michael D. Tanner, Cato Institute (July 25, 2012)

The Independent Payment Advisory Board: PPACA’s Anti-Constitutional and

Authoritarian Super-Legislature by Michael F. Cannon, Cato Institute Policy Analysis
no. 700 (June 4, 2012)

Could Mandatory Caps on Medical Malpractice Damages Harm Consumers? by

Shirley Svorny, Cato Institute Policy Analysis no. 685 (October 20, 2011)

Reforming Medical Malpractice Liability through Contract by Michael F. Cannon,

Cato Institute Working Paper no. 3 (November 12, 2010)

Yes, Mr. President: A Free Market Can Fix Health Care by Michael F. Cannon, Cato
Institute Policy Analysis no. 650 (October 21, 2009)

Fannie Med? Why a “Public Option” Is Hazardous to Your Health by Michael F.

Cannon, Cato Institute Policy Analysis no. 642 (July 27, 2009)

A Better Way to Generate and Use Comparative-Effectiveness Research by

Michael F. Cannon, Cato Institute Policy Analysis no. 632 (February 6, 2009)

Medical Licensing: An Obstacle to Affordable, Quality Care by Shirley Svorny, Cato

Institute Policy Analysis no. 621 (September 17, 2008)



825. Border Patrol Termination Rates for Discipline and Performance by Alex
Nowrasteh (November 2, 2017)

824. The Coming Transit Apocalypse by Randal O’Toole (October 24, 2017)

823. Zoning, Land-Use Planning, and Housing Affordability by Vanessa Brown

Calder (October 18, 2017)

822. Unforced Error: The Risks of Confrontation with Iran by Emma Ashford and
John Glaser (October 9, 2017)
821. Why the United States Should Welcome China’s Economic Leadership by
Colin Grabow (October 3, 2017)

820. A Balanced Threat Assessment of China’s South China Sea Policy by

Benjamin Herscovitch (August 28, 2017)

819. Doomed to Repeat It: The Long History of America’s Protectionist

Failures by Scott Lincicome (August 22, 2017)

818. Preserving the Iran Nuclear Deal: Perils and Prospects by Ariane Tabatabai
(August 15, 2017)

817. Reforming the National Flood Insurance Program: Toward Private Flood
Insurance by Ike Brannon and Ari Blask (July 19, 2017)

816: Withdrawing from Overseas Bases: Why a Forward-Deployed Military

Posture Is Unnecessary, Outdated, and Dangerous by John Glaser (July 18,

815. Cybersecurity or Protectionism? Defusing the Most Volatile Issue in the

U.S.–China Relationship by Daniel Ikenson (July 13, 2017)

814. Step Back: Lessons for U.S. Foreign Policy from the Failed War on Terror by
A. Trevor Thrall and Erik Goepner (June 26, 2017)

813. Commercial Speech and the Values of Free Expression by Martin H. Redish
(June 19, 2017)

812.  ould More Government Infrastructure Spending Boost the U.S.

Economy? by Ryan Bourne (June 6, 2017)

811. Four Decades and Counting: The Continued Failure of the War on Drugs by
Christopher J. Coyne and Abigail R. Hall (April 12, 2017)

810. Not Just Treading Water: In Higher Education, Tuition Often Does More
than Replace Lost Appropriations by Neal McCluskey (February 15, 2017)

809. Stingray: A New Frontier in Police Surveillance by Adam Bates (January 25,

808. Curse or Blessing? How Institutions Determine Success in Resource-Rich

Economies by Peter Kaznacheev (January 11, 2017)

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