A family medicine practice in Arizona has a panel that thins out every May, when several hundred patients drive back to Minnesota, Wisconsin and Iowa for the summer. Last year one of the physicians kept seeing them by video: blood pressure follow-ups, refills, a couple of rashes. The visits were clinically fine. Then a Medicare Advantage plan asked, on a routine records request, where the patient was during a July visit. The answer was a lake house outside Brainerd, Minnesota. The physician held an Arizona license and nothing else.
That is the whole problem with telehealth across state lines in one sentence. The practice of medicine happens where the patient is, not where the physician is. A video visit with a patient sitting in Minnesota is practicing medicine in Minnesota, and the Minnesota Board of Medical Practice, not Arizona's, decides whether the physician was allowed to do it. The pandemic waivers that let practices ignore this ended years ago. What is left is a patchwork of state rules, a few useful compacts, and payer requirements that do not always line up.
A glossary line before we start. Telehealth is a real-time visit delivered by audio-video or audio-only technology. A physician license is issued by a state medical board and is valid only in that state. A licensure compact is an agreement among states that makes it faster to get a license in, or a privilege to practice in, other member states. No compact creates a national license.
Key takeaways
- Every state medical board holds that the physician must be licensed in the state where the patient is physically located at the time of the visit, with narrow exceptions that vary by state.
- Medicare's telehealth flexibilities, extended through 2027, change what Medicare pays for, not which license the physician needs.
- The Interstate Medical Licensure Compact now covers 44 states plus the District of Columbia and Guam and is the fastest route to a full license in a second state.
- Controlled substance prescribing by telehealth runs under a DEA temporary rule that expires December 31, 2026, and the DEA expects a registration in the patient's state.
- The practical fix is a license matrix: count where your patients actually are, license where the volume is, and route the rest.
Telehealth across state lines starts with the patient's location
The rule is simple to state and awkward to live with. If the patient is in Minnesota when the visit happens, Minnesota law applies, and Minnesota requires a Minnesota license (or a Minnesota-recognized exception) to treat that patient. It does not matter that the patient is established with the practice or that the physician is sitting in Arizona. Every state board holds this position.
The exceptions are real but narrow. Some states allow a limited number of consultations at the request of an in-state physician. A few allow follow-up care for an established patient who is temporarily in the state, sometimes with a visit cap. Florida has had an out-of-state telehealth provider registration since 2019 that lets a physician licensed elsewhere treat Florida patients by telehealth without a full Florida license, provided they never practice in person there, and a handful of other states have registration models of their own. Before you rely on any exception, read the statute or the board's guidance for that state, not a summary, and save a dated copy.
The documentation habit that protects the practice is trivial and almost nobody does it: at the start of every telehealth visit, the clinician asks where the patient is right now and records the city and state in the note. When a payer or a board asks later, the note answers instead of the physician's memory.
What Medicare, Medicaid and commercial plans each require
Medicare causes the most confusion here because its telehealth flexibilities are so widely discussed. Congress has extended them through December 31, 2027: a Medicare patient can be at home (place of service 10) or anywhere else (place of service 02), in any part of the country, and the visit is payable, with modifier 95 for audio-video and 93 for audio-only. What the extension does not do is touch licensure. CMS requires that the practitioner be licensed in the state where the patient is located, and that is a condition of payment. A Medicare claim for the Brainerd visit is a claim for a service the physician was not licensed to provide.
Medicaid is fifty different programs. Each state decides whether it covers telehealth, which codes, and whether an out-of-state provider can be paid at all, and in most states the practitioner must enroll in that state's Medicaid program, which usually requires a license there. For an Arizona practice, a Medicaid patient summering in Minnesota is a visit to refer, not to bill.
Commercial plans sit in between. A Blue Cross Blue Shield of Arizona member in Minnesota is still covered by the Arizona plan, but the physician's network participation was credentialed against an Arizona license, and most participation agreements require a valid license where services are rendered. Some plans pay these claims without a question; others recoup after a records review, as the Medicare Advantage plan did above. We treat commercial telehealth across state lines the same way as Medicare: license first, then bill.
| Payer type | Where the license must be | Enrollment or credentialing | Place of service and modifiers |
|---|---|---|---|
| Medicare Part B | Patient's state | Your existing MAC enrollment; no second enrollment for the patient's state | POS 10 (home) or 02 (elsewhere), modifier 95 or 93 |
| Medicare Advantage | Patient's state | Plan contract; out-of-network rules if not contracted | Plan-specific, usually follows Medicare |
| Medicaid | Patient's state | Enroll in that state's program first | State-specific codes and modifiers |
| Commercial | Patient's state | Contract usually requires license where services are rendered | Plan policy; many follow CPT and POS 10/02 |
The compact options and who each one helps
A compact does not let a physician practice in a member state on the home license. It shortens the path to a license or a privilege there, and the distinction sets the cost and the renewal burden.
The Interstate Medical Licensure Compact (IMLC) is the one physicians ask about. As of this month it includes 44 states plus the District of Columbia and Guam; Alaska joined in June 2026, and Arkansas, New Mexico and Rhode Island have passed the legislation and are implementing it. The compact issues full, separate licenses in each member state the physician selects, from a single verified application built on the physician's state of principal license. To qualify, the physician needs a full unrestricted license in a member state that is also their principal state (by residence, by where at least a quarter of practice occurs, by employer location, or by where they file federal taxes), a clean disciplinary history, and board certification or a recent residency. Expect a compact fee plus each state's own license fee, and a renewal on each state's cycle. California, New York, Florida and Texas are not members and still require a standard application.
Nurses have the Nurse Licensure Compact, a true multistate license active in about 40 states, which covers RNs and LPNs but not nurse practitioners; the separate APRN Compact has not begun operating. Psychologists have PSYPACT, active in more than 40 jurisdictions. Physician assistants have the PA Licensure Compact, which reached its activation threshold in May 2024 and is only now beginning to issue privileges, so check pacompact.org for your states before assuming anything.
Prescribing across state lines and the DEA clock
Prescribing adds a second layer. A prescription for a patient in another state must comply with that state's rules, and pharmacies there may refuse a prescriber they cannot verify against a state license. Controlled substances add federal rules. The Ryan Haight Act generally requires an in-person evaluation before a controlled substance can be prescribed by telemedicine. Since March 2020 that requirement has been waived under a series of temporary rules. The fourth temporary extension, published in the Federal Register on December 31, 2025, runs through December 31, 2026, and allows DEA-registered practitioners to prescribe Schedule II through V substances by audio-video telemedicine without a prior in-person visit. The DEA and HHS say they intend to finalize permanent rules before it ends. Do not build a 2027 workflow on the assumption that the waiver continues.
The DEA also expects a separate registration in each state where a practitioner prescribes controlled substances, because registration is tied to a location within a state. A physician with a new Minnesota license who intends to prescribe controlled substances there should plan on a Minnesota DEA registration and on checking Minnesota's prescription monitoring program. Have counsel review this piece if the practice prescribes controlled substances across state lines regularly; the penalties are not billing penalties.
Building the license matrix: a worked example
The question is not "can we do telehealth across state lines" but "in which states is it worth being licensed." The answer comes from a report most practices have never run: telehealth visits by patient location for the last twelve months. Most systems do not capture location in a structured field, so the first pass uses the address on file as a proxy.
Take a six-physician practice with 2,100 telehealth visits last year: 1,790 in the home state, 210 in Minnesota, 58 in Wisconsin, 27 in Iowa, and 15 across nine other states. At an average allowed amount of about $92 per visit, Minnesota represents roughly $19,300 a year, Wisconsin about $5,300, Iowa about $2,500, and the nine-state tail about $1,400. The Minnesota license pays for itself many times over even if only two physicians hold it. Wisconsin is a judgment call that depends on which physicians those 58 patients see. Iowa and the tail are not worth licensing; those patients get scheduled for when they are back or referred locally.
The matrix then has one row per state with three possible actions: license, use a documented exception, or do not see patients there. For each "license" state, list the physicians who will apply, the DEA registration decision, and the payer enrollment steps, Medicaid especially. Our credentialing team builds these matrices as part of provider enrollment because the enrollments and payer notifications are where the work is. Then give scheduling the list. When a patient books a telehealth visit, the scheduler asks where they will be; if the state is approved for that clinician the visit is booked, and if not the scheduler offers an in-person visit later, a licensed colleague, or a local referral. That single question prevents almost every problem in this article.
Questions we hear
The patient is established with us. Doesn't that make the follow-up visit legal?
Not by itself. A minority of states have an established-patient exception, each with its own conditions and caps. Where it exists and you meet it, document that you relied on it. Where it does not, knowing the patient does not change the licensing rule.
Can we just bill the visit as if the patient were at home in our state?
No. The place of service and the patient's location on the claim have to be true, and a false claim to Medicare is a much larger problem than a licensing complaint. If you were not licensed to provide the visit, do not bill it, and talk with counsel about whether anything else is owed.
Is the compact license worth it if the physician only sees a dozen patients in that state?
Usually not, once you count the state fee, the compact fee, renewals, state-specific continuing education, a possible DEA registration and a possible Medicaid enrollment. A dozen visits a year is a referral list, not a license.
What to do this week
- Add "Where are you located right now?" to the telehealth intake script and a required location line to the telehealth note template.
- Run the twelve-month telehealth-by-patient-state report and build the first version of the license matrix.
- Check each clinician's licenses against the states where visits actually occurred and, for gap states inside the Interstate Medical Licensure Compact, start the compact application.
- Review controlled substance prescribing across state lines with counsel before the DEA temporary rule ends on December 31, 2026.
- Give scheduling the approved-state list per clinician and the script for patients who are somewhere else.
