Can Interstate Licensure Compacts Enhance the Health Care Workforce?

Although health care licensing is traditionally a state function, rigid state borders can be ill-suited to meet needs in terms of access to care for underserved populations, emergency preparedness, and the changing nature of telemedicine-based care delivery. During the COVID-19 pandemic, at least 45 states waived or modified existing rules to allow health care practitioners to work across state lines through temporary licensure reciprocity. Amid ongoing, national concerns about health care workforce shortages and “the Great Resignation,” policymakers and researchers are now debating options for longer-term licensure policy to mitigate the workforce crisis. It is therefore important to think through whether licensure compacts can help meaningfully enhance the health care workforce and improve access to care.

What Are Interstate Licensure Compacts?

State-based licensing boards issue licenses, promulgate regulations governing qualifications, scopes, and dimensions of practice. Broadly speaking, they implement licensing structures established by statute that are intended to serve consumer protection, patient safety, and discipline and enforcement functions. Interstate compacts, which cover many industries, are statutorily enacted legal agreements designed to allow states to work across borders to further mutual goals. As Marschall Smith, executive director of the Interstate Medical Licensure Compact Commission, described in a recent policy forum hosted by the Rutgers Center for State Health Policy, the driver’s license compact is an example of an interstate compact that has been effectively implemented nationally. An individual who holds an active driver’s license in one state can use that license to drive in any U.S. state. The individual must, however, abide by the driving laws (e.g., speed limits) of each locality.

Health care licensure compacts allow a practitioner who holds primary licensure in a compact state to obtain a multistate license or expedited single-state license(s) to practice in other participating states. Each compact functions independently, and parameters including mutual recognition, reciprocity and endorsement vary. Currently, there are three national health care interstate licensure compacts – for physicians, nurses, and licensed psychologists, each of which became operational in the last decade. Efforts have started to create compacts for social workers, professional counselors, and dentists and dental hygienists.

Typically, states seeking membership must enact model compact legislation to codify and streamline uniform terms. As of February 2023, the physician compact has been implemented in 33 states and the territory of Guam; the nursing compact has been implemented in 36 states and Guam; and the psychologist compact has been implemented in 31 states, the Commonwealth of the Northern Mariana Islands, and Washington D.C.

States participating in the interstate licensure compacts, as of March 2023

How Compacts Can Impact Access to Care

Data on the increase in physician supply achieved through interstate compacts is limited but suggests they enhance the workforce landscape. The Interstate Medical Licensure Compact (IMLC) reports that, throughout the COVID-19 public health emergency, the IMLC issued over 8,000 compact licenses, totaling over 57,000 compact licenses to date. On average, states that joined the compact have seen a 10% to 15% increase in licensed physicians, with the largest increases in states with large rural or underserved populations. Standardized data indicating specialty by provider license type would further offer valuable insights.

In our study of the New Jersey COVID-19 temporary emergency reciprocity licensure program, we found that out-of-state practitioners who obtained temporary licensure to practice in New Jersey conversed with patients in at least thirty-six languages. This suggests that future implementations of interstate licensure compacts could also expand access to language-concordant care.

Still, we cannot dismiss the “zero-sum” nature of interstate licensure compacts. Compacts enhance license portability and add providers to new state markets; they do not increase the national provider pool. As Edna Cadmus, PhD, RN, executive director of the New Jersey Collaborating Center for Nursing explained during the policy forum, compacts facilitated the availability of travel nurses during the pandemic. Travel nurses were essential in meeting surge needs; however, unpredictable relocation patterns of workforce on the move created new staffing challenges during that time period. Concurrent with the need for optimized licensure policy, the U.S. requires strategies and investments to increase multiple provider pipelines to meet demand over time.

Compacts Can Enable Care Continuity

Society has become more diverse, portable, and mobile, and a workforce that adapts is better able to maintain care continuity. As Peter DeNigris, PsyD, 2022 president of the New Jersey Psychological Association, and Alfred F. Tallia, MD, MPH, chair of the National Board of Medical Examiners, emphasized during the policy forum, care continuity is especially critical for mental health and primary care where a longitudinal patient-provider relationship is optimal to maintain care quality. For college students, seasonal workers, and “snow birds,” it is not uncommon to live in different states in different parts of the years. Interstate licensure compacts can help preserve the patient-provider relationship through periods of relocation.

What About Care Quality?

Much remains unknown about a relationship, if any, between quality of care and multistate licensure. Questions we heard from licensure stakeholders include: Would the practitioner have enough knowledge about local services to fully support the patient? If the practitioner is exclusively using telehealth to see out-of-state patients, what types of care might fall through gaps or be infeasible? It is, however, important to highlight that compacts have developed rigorous criteria with input from national practitioner boards and state licensing boards, and practitioners must meet the criteria to obtain a compact license, which includes holding an unencumbered license in his/her home state. During the policy forum, IMLC executive director Marshall Smith noted that, of the over 15,000 physicians who have used a compact license, only 19 have been disciplined or lost their privilege to use the license.

Implications for Policymakers and Health Systems

From a public health policy perspective, there are at least three reasons why it’s time to prioritize a modernized, strategic, long-term approach to licensure of the health professions.

First, we must recognize licensure policy is an essential part of emergency and pandemic preparedness. Collectively, we need our laws to enable timely, efficient, and agile provider response to exigencies, while maintaining durable regulatory infrastructures. We need to expect the next emergency and incorporate preparedness into our licensure policies.

Second, telemedicine and telehealth have forever changed health care delivery. Health care is now delivered in ways, places, and platforms that original licensing structures could not have imagined. Although ongoing evaluation of telehealth modalities is needed, at this point we should at least recognize that the purpose of licensing regulation should be to support – not suppress – increased access to quality care regardless of state borders.

Third, from an equity perspective, it is essential that licensing policy center those patients most affected by limited access to care. Rigid licensure rules should be scrutinized to ensure that they don’t suppress the health care provider supply and contribute to health disparities.

Interstate licensure is not a panacea for the health care workforce crisis. For now, compacts enhance the capacity of the existing workforce by increasing the reach of practitioners into areas of high need, potentially reducing strain on health care workers in those areas. We encourage new and nuanced dialogue among policymakers and researchers to examine the relative value of divergent compact models and licensure innovation as strategies to enable workforce agility, mitigate provider supply crises and enhance access to care.