Unresolved issues snarl licensure laws



For all the hype and gadgetry associated with it, telemedicine is simply the use of telecommunications technology to provide healthcare services. It may involve familiar technology such as the telephone and fax machine, and often differs from the mail only in the speed of the data transfer. Because it is impossible to draw a clear distinction between telemedicine consultations and other forms of physician-to-physician communication, attempts to regulate telemedicine may, as an unintended consequence, restrict traditional forms of physician communication.

State legislatures have begun drafting new laws in response to the emergence of telemedicine as a practical form of healthcare delivery. These laws could have a substantial impact on telemedicine and physician consultations generally.

Every state requires physicians and allied health professionals to secure a license in order to practice their profession. Licensure allows the state to control access to the market for professional services. Licensing requirements must balance the state's responsibility for protecting public health with the Constitution's prohibition against state interference with interstate commerce.1

The states enacted physician licensing statutes between 1870 and 1910 in response to concerns that unqualified persons were representing themselves to the public as competent to diagnose and treat disease.2 Laypeople did not have a reliable means of discerning who was qualified to practice medicine and who was not.3

By requiring a license to practice medicine, the states sought to stop fraudulent solicitations and incompetent practitioners.4 Because licensing restricts entry into medical practice, it has the effect of (and, to an extent, is motivated by a desire to) limit competition for the profession's market.5

These statutes established systems of professional self-regulation, creating boards controlled by licensed physicians to determine the standards for entry into the profession and standards of professional conduct. The boards set the standards as well as enforce them. They are responsible for reviewing applications for licensure and investigating allegations of incompetence or unprofessional conduct. License-holders found to have violated professional standards may have their license terminated, suspended, or conditioned by the board.6 In addition, the boards advise state legislatures and governors on policies related to the profession.

Every state defines the practice of medicine broadly. Nevada, for example, defines the practice of medicine as follows: To diagnose, treat, correct, prevent, or prescribe for any human disease, ailment, injury, infirmity, or deformity or other condition, physical or mental, by any means or instrumentality.7 The definitions are so broad that exceptions must be made to allow laypeople to administer home remedies.8


The practice of medicine without a license is prohibited, whether the physician is treating the patient in person or from a distant location. When a physician exercises primary responsibility for the care of a patient, that physician is practicing medicine in the state where the patient is located and is subject to that state's laws regarding medical practice. Thus, state boards have denied requests from out-of-state psychiatrists, for example, to conduct therapy with patients located in the state via telephone or videoconferencing equipment.9

Yet, until recently, physicians who provided an opinion or interpretation to a local physician with primary patient care responsibility were not regarded as practicing in the state where the local physician and patient were located.10 The advent of telemedicine and its potential to create a new form of competition for specialty services have prompted state legislatures and medical boards to re-examine this view.

Six states have already enacted statutes or regulations to restrict out-of-state physicians from providing telemedicine services.11 Several more have bills pending. The medical boards and medical associations in every state are studying the issue.12,13


Consultations between physicians are a vital part of medical practice. The consultation may take the form of a surgeon answering a primary care physician's questions about follow-up, a hematologist reviewing the results of exams and tests with the patient's gastroenterologist, or a request for interpretation of images or slides.14 Regardless of form, the ability of physicians to access the expertise and perspectives of their fellow physicians is a critical factor in the quality of patient care.15

If the consulting physician is regarded as practicing medicine in the state where the other physician is located, then the consulting physician must have a license from that state, unless the activity falls within the scope of the state's consultation exception.

The consultation exceptions in some states are broad. Delaware, for example, exempts physicians "licensed to practice medicine in any of the United States, or a foreign country" who are in consultation with a Delaware physician.16 Others are narrowly written to permit "occasional," "infrequent," or "irregular" consultations.17

A few states do not have a statutory exception for consultations, but their medical boards and the attorneys general have not considered out-of-state consulting physicians to be practicing medicine.18 There have been no reported prosecutions of out-of-state physicians performing consultations with a local physician in states with a narrow or no statutory exception.19


Recent legislation and regulations to restrict out-of-state telemedicine practitioners have created uncertainties regarding the scope of permissible interstate medical activities. In addition to the six states now restricting out-of-state telemedicine, several others have issued restrictive interpretations of their consultation exceptions.20 More states are considering legislation.

Oklahoma recently enacted a statute that broadens its definition of medical practice to include the performance "by any person outside of this state, through an ongoing regular arrangement, of diagnostic or treatment services through electronic communications, for any patient whose condition is being diagnosed or treated within this state."21

Indiana has also amended its definition of medical practice to encompass provision of "diagnostic or treatment services" through electronic means "on a regular, routine, and non-episodic basis" or "under an oral or written agreement to regularly provide medical services."22 The legislation specifies that nonresident physicians are not practicing medicine in Indiana by providing "a second opinion" to an Indiana-licensed physician or by providing "diagnostic or treatment services to a patient in Indiana following medical care originally provided to the patient outside of Indiana."23 However, the statutory language excepting out-of-state physicians in "consultation" with an Indiana physician was not altered.24

South Dakota now requires licensure for "any nonresident physician...located outside this state" who provides diagnostic or treatment services "through electronic means" to a person located in South Dakota "under a contract" with a healthcare provider, clinic, hospital, or other healthcare facility.25

Texas has adopted the most comprehensive licensing restriction. It requires physicians outside Texas who "through the use of any medium" perform "an act that is part of a patient care service initiated in this state...and that would affect the diagnosis or treatment of the patient" to be licensed in Texas.26

A narrow exception is carved out for specialists providing episodic consultations to Texas physicians who practice in the same medical specialty.27 However, the long-standing exception for out-of-state physicians consulted by a Texas physician "but who have no office in Texas and who appoint no place in this state for seeing, examining, or treating patients" remains on the books.28

The Federation of State Medical Boards (FSMB) has proposed a model act to regulate interstate medical practice.29 The model act defines the practice of medicine across state lines as rendering any "written or otherwise documented" medical opinion concerning the diagnosis or treatment of a patient located in another state.30

Any physician providing such an opinion would be required to be licensed in the state where the patient is located, with the following exceptions: in an emergency; when the opinion is provided without compensation; and if the physician engages in "the practice of medicine across state lines" only on an "irregular or infrequent basis."31

Practice is considered "irregular or infrequent" if it occurs "less than once monthly or involves less than ten patients on an annual basis, or comprises less than one percent of the physician's diagnostic or therapeutic practice."32


Although the statutes described above differ, their general effect is to make any routine provision of diagnostic or medical services subject to the state's licensing requirement. Broadening the licensing requirement limits the ability of physicians in the state to consult with colleagues in other states.

Even traditional physician-to-physician communications could be interpreted as subject to licensure under these statutes. Such communications include reference laboratory services and related consultations with pathologists; cross-specialty and subspecialty reviews; and second opinions on the interpretation of biopsies, images, tests, or exams.

These requirements will have a particularly adverse effect on multi-state group practices and academic medical centers. Group practices are structured to foster cross-disciplinary collaboration. That collaboration would no longer be possible without licensing all of the group's physicians in all the states where the group is located.

Academic medical centers, even if they do not operate as a group practice, have staffs of specialists and subspecialists who rely on referrals from many states to maintain their practices. The ability of these physicians to address inquiries and conduct follow-up may be disrupted.

Finally, the prohibition against the regular provision of services imposes a new documentation obligation on physicians.33

To ensure that they do not provide more than occasional services in any state where they are not licensed, physicians will need to keep track of each state's definition of "regular" consultations and the number of consultations performed with physicians in each state.

These requirements will cause administrative nightmares and delay patient services, as physicians are forced to determine whether the consultant of choice is licensed in their state or, if not licensed, then perhaps willing and able to consult on the case under the exception for occasional consultations.34


The provision in the FSMB's model that excepts services provided without compensation is not as simple as it may appear. Capitated payments and global surgery fees create situations in which services that are not separately billable cannot be regarded as uncompensated.

Also, any time one member of a physician group treating a patient seeks advice from a member of the group located in another state, the consultation may be considered part of the service for which the patient is paying. The consulted colleague could therefore be subject to the first state's licensure requirement.

Narrow interpretations of the consultation exception that require licensure for consultations between physicians in different specialties or for primary interpretations of diagnostic tests are unjustified and difficult to apply. The justification for the licensing requirement was to protect laypersons from solicitation by unqualified practitioners.

Physicians can evaluate colleagues' qualifications and have an incentive to consult well-qualified experts. The ability to determine qualifications of fellow physicians is not limited to specialty. Physicians regularly seek consultations outside their specialty. There is no evidence that physicians seek inappropriate out-of-state consultations. Nor is there reason to believe that a license from one state provides greater assurance of quality than one from any other state.35

There are not, moreover, clear lines between specialities. A state medical license is a general license to practice medicine and surgery. The scope of a physician's practice is generally, but not always, defined by the credentialing process at the hospital, clinic, or HMO where the physician has privileges. Ultimately, the physician herself is responsible for defining and staying within the appropriate scope of her practice.

For example, orthopedists, emergency room physicians, and physicians in many other specialities regularly read x-rays and can refer an x-ray to a radiologist for a legitimate second opinion.


The time and cost required to obtain licensure in another state is a major deterrent to multiple state licensure. For certain physicians who have held a license for more than 10 years, who have only one or two years of postgraduate training, or who obtained their postgraduate training outside the U.S. or Canada, the application requirements in some states are prohibitive.

Licensure "by endorsement" is the process by which a physician licensed in one state seeks a license from a second state.36 Each state has an independent application process with separate requirements.

In Minnesota, for example, applicants are required to list their degrees, postgraduate training, medical licenses, all hospitals where they have or have had privileges, and board certifications. In addition, applicants must account for time elapsed since the beginning of high school, whether spent in school, practice, training, or otherwise.37 Original documents, such as birth certificates and social security cards, are required to establish identity. Each credential must be verified. References are required.

A physician practicing today may have taken one of several different exams to qualify for licensure.38,39 Many states require the current licensing exam to be taken and passed if it has been more than seven to 10 years since the applicant passed the then-current exam. This requirement exists despite the fact that applicants may, through specialization, have limited the scope of their practice and may have had no exposure since medical school to some areas covered in the general exam. For these physicians, the time and expense associated with preparation and taking the exam can be prohibitive.

The other requirement that bars a substantial number of licensed physicians from qualifying for licensure by endorsement is the postgraduate training requirement. The number of years of postgraduate training required varies from none to three years. Many states require that the postgraduate training be obtained in the U.S. or Canada.40 Several states require a greater number of years of postgraduate training for foreign medical graduates than for U.S. graduates, without regard to the applicant's other credentials and experience.41

Processing a license application can take four to 12 months.42,43 Of course, there are registration and application fees, which, in 1995, ranged from $100 in Pennsylvania to about $1350 in Connecticut and Texas.44 There may also be requirements for oral interviews, oral exams, or, in a few states, a jurisprudence exam.45

There is another issue as well. License-holders become subject to many state obligations. This can increase their liability exposure and may subject them to unanticipated and, perhaps, conflicting legal obligations.

Jurisdiction for suit. An out-of-state physician may be required to defend a suit in a state if the claims arise from an opinion or interpretation provided to a physician in the state.46

Jurisdiction for claims arising out of the defendant's activity in the state is called "specific jurisdiction." License-holders may be subject to jurisdiction for a broader scope of claims. This "general jurisdiction" leaves the physician vulnerable to forum-shopping by plaintiffs. Jurisdictional differences, for example, in statutes of limitation, evidentiary rules, procedural requirements, or litigation costs may make the claim more difficult to defend.

Medical record and authorization requirements. To the extent a physician is acting under her state medical license, she is responsible for complying with state laws governing medical practice.

If the physician is located in one state and treating a patient in another state where the physician also holds a license, it is not yet clear whether the physician will be deemed to be practicing under the laws of one or both states. This creates a possibility of conflicting legal requirements applying to the physician's practice, particularly in regard to medical records and authorization requirements, reporting requirements, and professional discipline.

Reporting requirements. License-holders are subject to a variety of public reporting requirements, such as child abuse, abuse of vulnerable adults, infectious disease, use of controlled substances by pregnant women, etc. But states are inconsistent in defining a physician's reporting obligation.47

As with the confidentiality and authorization requirements, a failure to report is actionable by the medical board and, in some cases, through criminal or civil suit.

Professional discipline. Standards of professional conduct have been developed independently by the legislatures and medical boards of each state. A physician licensed in multiple states may unwittingly violate a professional conduct standard.48

Billing. Some states prohibit or limit balance billing of Medicare beneficiaries residing in those states.49 Some states require physicians to conspicuously post the physician's policy regarding the acceptance of Medicare assignment.50

License application requirements, inconsistencies in state laws applicable to physicians, and lack of coordination between the state medical boards make licensing requirements an effective barrier to interstate medical activity.

If states continue extending licensure requirements to out-of-state telemedicine practitioners, the result will be a patchwork of laws that seriously restrict physician access to consultations across state lines. The following alternatives are worth considering.

Consultations are vital to quality medical care and should not be restricted. Physicians' access to the expertise of their colleagues should not be restricted. The quality of medical care is enhanced if physicians are able to obtain opinions or interpretations from the physician of their choice.

In states where the medical practice act exempts consultations from the license requirement, and this consultation exemption has not been narrowed by board interpretation, local physicians retain the traditional ability to consult as desired with out-of-state physicians.

The trend, however, is for states to extend their licensing requirements through legislation or board action. Because this has the effect of restricting competition to the state's market for physician services, and provides revenue to state medical boards, it is unlikely that the trend will change. A coordinated system for regulating practice across states will not be developed without an impetus from the federal government.

A consistent standard for requiring a license should be adopted by all states. Physicians must know what they can and cannot do when answering inquiries from colleagues in other states.

The standard should be easy to apply, without forcing physicians to keep a tally of phone calls per state, per month, or to choose between a conservative or aggressive interpretation of ambiguous statutory language.

A bill pending in the California Senate would exempt from licensure out-of-state physicians who are in consultation with a licensed California physician retaining primary responsibility for the patient's diagnosis and treatment.51 This approach is consistent with the purpose of the licensing laws and is understandable and easy for physicians to apply.


Given the discussion above, it is clear that three issues exist for which solutions must be developed. The first is accountability of out-of-state consultants to the medical boards of distant states.

The FSMB has taken the position that the public in each state should have remedy, other than the tort system, for unprofessional conduct by out-of-state physicians. The merits of this position should be explored further.

When the physician acts only as a consultant to a local provider who retains principal responsibility for diagnosis and treatment decisions, there may not be a need for any remedy other than the ability to sue for malpractice.

If there is a substantial difference among states in the standards governing physician conduct, it may be necessary either to provide each state's medical board with the ability to investigate out-of-state consultants (as already exists in South Dakota and Washington)52 or establish a federal system.53

Any system that is adopted should protect physicians from multiple investigations and findings based on the same allegations. The system should also ensure that disciplinary action taken by one state is promptly made effective in all the other states where the physician holds a license.

The second issue to be addressed is harmonizing state licensure requirements to allow physicians to practice in multiple states. Telemedicine's greatest value will be in delivering healthcare to underserved populations, such as rural residents and home-bound persons. This will depend on physicians being able to deliver services to the patient without the mediation of a local physician.

In all states, this currently requires that the physician who provides the service directly, or the allied health professionals he supervises, be licensed in the state. Unless this process of licensure "by endorsement" is dramatically streamlined, licensure statutes will remain a barrier to the use of telemedicine.

The FSMB model act was an effort to address this problem. But it was only a half-step toward that goal. While it would have established an expedited procedure, it extended licensure requirements to any "written or otherwise documented medical opinion." It also explicitly subjected the out-of-state physician to multiple, even contradictory, state requirements governing the confidentiality of patient medical records.54

The model act made no effort to address the other state law obligations attendant to licensure. A system providing uniform standards for endorsement of physicians licensed in other states should be encouraged. Models from other nations and regions should be studied. Australia and the European Union may provide an excellent model of an efficient, reciprocal licensure system.55 The other possibility is a national licensure system, but that may not be politically possible.56

The third issue to be addressed is defining which laws apply to interstate medical practice. Licensure is one of many legal standards governing an episode of care. Standards of professional conduct, confidentiality and authorization requirements, public health reporting requirements, billing requirements, and tax obligations are some of the many other varying state standards affecting interstate medical activity.

Legislative measures to restrict interstate telemedicine will not only hamper use of telemedicine technology but will also restrict traditional forms of physician consultation. This technology has given rise to new issues that will be resolved only when consistent licensing requirements are adopted, legal standards governing professional conduct and medical record confidentiality harmonized, and a mechanism established to address complaints against out-of-state consultants.

References available upon request.
Call 415/905-2606.

The views expressed in this article are the authors' and do not necessarily reflect the views of Mayo Foundation.


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