The Interstate Medical Licensure Compact: Making the Business Case

Origins of State-Based Physician Licensing

Readers of this article, and of this journal, are likely to be familiar with important recent works on the history of medical regulation, such as Medical Licensure and Discipline in America, authored by David Johnson and Humayun Chaudhry (2012) and Ruth Horowitz's In the Public Interest: Medical Licensing and the Disciplinary Process (2013). Though it is not necessary to repeat the efforts of these and other authors, it is instructive for this discussion to underscore several key themes through highlighting specific historical episodes and milestones of the long history of state-based medical regulation.

AN INTERSTATE COMPACT OFFERS THE PROSPECT OF TAKING A GIANT LEAP FORWARD IN EXPEDITED LICENSURE, A MEANS TO FACILITATE MULTISTATE PRACTICE WITHIN A STATE-BASED LICENSING FRAMEWORK.

Efforts to regulate the practice of physicians predate the founding of the United States, with the earliest legislation dating to 1639 in the Virginia Colony, the Massachusetts Bay Colony in 1649 and in New York in 1665.1 Precursory state requirements to have a license issued through a medical society comprised of physician peers (such as New York in 17602, New Jersey in 17723, Pennsylvania in 17944, and Maryland in 17985) and to have an examination (New Jersey in 1772 and New York in 1797, for example) were commonplace.6 However, between 1826 and 1852 nearly every state (except New Jersey) repealed laws requiring licensure of physicians, due primarily to consumer confusion and skepticism about the efficacy of the many types of physicians practicing in the day. Nevertheless, as a result of multiple effects, not the least of which were public sanitation and scientific advances, states gradually established (or reestablished) licensing boards and independent examinations of their own by 1910.7,8,9

EFFORTS TO REGULATE THE PRACTICE OF PHYSICIANS PREDATE THE FOUNDING OF THE UNITED STATES, WITH THE EARLIEST LEGISLATION DATING TO 1639 IN THE VIRGINIA COLONY.

In other words, even prior to the nation's founding, the basic infrastructure of how we regulate physicians at the state level emerged, and it has since evolved into a model (well over a century ago) that is easily recognizable as similar to what universally exists in the U.S. today. How state medical boards have responded to changes in their operating environment, including the expectations placed on them by the public and key stakeholders can be easily illustrated:

• While the founding of the National Board of Medical Examiners (NBME) in 1915 might have hastened movement toward a more unified examination process for medical students, states only gradually gave up the use of their own licensing examinations. However, it became apparent that educators were embracing new and better methods of testing, as a means to truly measure fitness for practice and not just factual recall.10,11 Over time, state examinations gave way to national examinations — the NBME, the Federation Licensing Examination (FLEX), the National Board of Osteopathic Medical Examiners (NBOME)12 Examination, and ultimately, the U.S. Medical Licensing Examination (USMLE) and the Comprehensive Osteopathic Medical Licensing Examination (COMLEX-USA) — that promoted greater consistency in content and standards, in contrast to the variability of state examinations.13

• Although medical boards' initial focus was on the licensing of physicians, as time went on, public skepticism grew about how licensing (sometimes licensing for life) was protecting the public. Relatively few complaints resulted in professional discipline, and most often, these were in the realm of substance abuse or sexual or other misconduct, not substandard practice. In response, Dr. Walter Bierring called for boards to broaden their perspective in the January 1960 Federation Bulletin:“If a state cannot, or does not, for just cause, revoke a license or discipline a physician…a fatal weakness exists. If no machinery exists for investigations and hearings…discipline does not really exist. If there is nothing beyond what the state or county society can do, a license to practice becomes a potential license for abuse.”14

• Today, the range and volume of state medical board discipline has expanded greatly, with substandard practice comprising a significant percentage of the disciplinary work of boards.

• In stark contrast to the stated mission of state medical boards to protect the public, for many years these boards were populated only by licensees. However in 1961, that changed for the first time with the appointment of one “public member” to the Medical Board of California.15 This began a movement that has resulted in virtually all state medical boards having public member representation today; moreover, these members are not merely tolerated, but appreciated for bringing an important alternative perspective. As Horowitz notes “[t]he idea that the public should have its own representatives on a board is generally accepted today, but it was once controversial.”16

• In recent years, state medical boards have responded positively to license portability efforts led by the FSMB. Sixty-seven of 69 state medical boards that engage in licensing activities now accept or require the FSMB's Federation Credentials Verification Service, which provides a centralized process for boards to obtain primary source verified physician records for credentialing.17 Twenty-two states use the FSMB's Uniform Application, which standardizes and simplifies the licensure application process for physicians.18

• In response to growing sentiment that better communication between states was needed to prevent physicians from using increased mobility to evade detection, medical boards began to rely on databases such as the National Practitioner Data Bank (NPDB) and the FSMB's Physician Data Center as a part of their licensing activities. The NPDB, for example, was created in 1986 with the express purpose of “encouraging State licensing boards, hospitals and other health care entities, and professional societies to identify and discipline those who engage in unprofessional behavior, and to restrict the ability of incompetent physicians…to move from State to State without disclosure or discovery of previous…adverse action history.”19 Today, reporting to these databases, and checking them during the licensure process, is a commonplace activity for state boards.

It is true that the earliest licensing efforts in this country may have been aimed more at securing reimbursement for physicians than the virtue of patient safety, and that the repeal of many laws during the mid-nineteenth century reflected inter-professional squabbles, along with a dose of public suspicion. Nevertheless, with respect to the re-establishment of medical licensing, Horowitz notes “[t]he fact that legislatures first granted licensure to occupations concerned with health and cleanliness confirms a vital link between the successes of licensure and the public health movement.”20 Further, she states that “[w]ith the onset of the Progressive era, it was common for physicians to mention patients as main beneficiaries of the licensure policies advanced by medical societies.”21 These statements are powerful in that they not only capture the essence of why state medical boards were created and exist to this day, but that responsible physicians themselves recognize the value of state medical boards as a means of ensuring the safety of their patients and the general public. State boards have not wavered from that overarching mission, yet their responsibilities and activities continued to evolve through the twentieth century.

License Reciprocity and the Formation of the Federation of State Medical Boards

It is well known by many in the field of medical regulation that the Federation of State Medical Boards resulted from the 1912 merger of the National Confederation of State Medical Examining and Licensing Boards (National Confederation) and the American Confederation of Reciprocating Examining and Licensing Boards (American Confederation). What may be less broadly understood is that the issues of license reciprocity and barriers to physician mobility across state lines were pivotal to the fracture of the National Confederation and the creation of the American Confederation a decade earlier.22,23,24 At the heart of the American Confederation's mission was to create a national examining board to help eliminate obstacles to interstate practice. Shryock also describes the “continued efforts of the Reciprocity Confederation” during this period “to encourage inter-board agreements.”25 However, due to the practical constraints of limited financial resources for both organizations, combined with a public perception that two contending organizations did not serve the public interest, leaders from the organizations began merger discussions in 1910 and, on February 28, 1912, the National Confederation and the American Confederation adopted a constitution and by-laws creating the Federation of State Medical Boards.26,27

AT THE HEART OF THE AMERICAN CONFEDERATION'S MISSION WAS TO CREATE A NATIONAL EXAMINING BOARD TO HELP ELIMINATE OBSTACLES TO INTERSTATE PRACTICE.

A more nuanced understanding of the schism between the two organizations illustrates that the difficult questions of how to license and regulate physicians at the state level, yet allow movement of medical practice across state lines, have eluded leaders in this field for over 100 years and continue to resonate in today's debates. Interestingly, Johnson and Chaudhry speak to the public's expectations of the role of that newly-formed FSMB:

Looking back, these aspirations for a broadly influential Federation while flattering and well intentioned, expected perhaps too much from the fledgling organization. In some ways and at a fundamental level, writers such as those from Harper's and the Times misunderstood the true nature and authority of the Federation. They seemed to conflate an annual gathering of representatives from individual state gencies with a truly national body akin to a federal agency.28

More than a century ago, there was an acknowledgement of the important issues of license reciprocity and physician mobility across state lines, even in an era before telehealth29. In that day, the concern was to prevent unscrupulous physicians from fleeing across state borders. But the passage above also highlights an acknowledgement of the need and desire for interstate coordination, in a way that the Federation was not empowered to provide.

Concurrently, the use of interstate compacts in the early 20th century was beginning to evolve, but they did not yet possess the mechanisms to accommodate ongoing and complex regulation, such as that of interstate medical practice. As we shall observe below, important changes in interstate compact design and use place us today at a unique confluence point in history, one where the need is there and the tool has developed to ideally suit the need.

Emerging — and Emergent — Forces on State Medical Boards

The first sentence of the 2013 Congressional Research Service (CRS) report, “Physician Supply and the Affordable Care Act,” plainly states the relationship between physician supply and patient care: “[a]n adequate physician supply is important for the effective and efficient delivery of health care services and, therefore, for population health and the cost and quality of health care.”52 Consider that the Affordable Care Act projects that 32 million newly-insured Americans will enter the health care marketplace by 2019.53 The nation also continues to grow older and more populous. By 2050, U.S. Census numbers indicate the U.S. population will grow by over 85 million to 400 million, and the over-65 population, which statistically tends to use more health care services, will nearly double from 43.1 million to 83.7 million, or more than 20 percent of the overall population.54 Yet another factor that will affect the public's future utilization of health care is the growing prevalence of chronic disease, responsible for seven out of ten deaths in the U.S. in 2010, and of “lifestyle” conditions, such as obesity, which afflicts more than one-third of adults.55

At the same time, a shortage of physicians and other health care professionals is anticipated, which is likely to be exacerbated in certain clinical specialties and in certain geographic areas, especially rural and underserved communities. The Association of American Medical Colleges has estimated for some time that the nation will face a shortage of more than 90,000 MDs by 2020 and more than 130,000 by 2025.56 Moreover, the maldistribution of physicians in the United States has been well documented, both through research and through federal reimbursement policy.57,58,59

The interrelated issues of physician training and reimbursement also guide where and in what specialties physicians practice. The CRS report states that “some specialties, such as general surgery, geriatrics, the pediatric subspecialties, and psychiatry, have…widely acknowledged shortages.”60 In addition, a 2009 study by the Robert Graham Center noted that “[c]urrent U.S. graduate interest falls short of maintaining the current proportion of primary care in the physician workforce…This loss in production of primary care physicians may join the problem of maldistribution and further erode access to primary care services.”61 The relationship of medical school debt to selection of medical specialty is complex and not clearly determined, but there is evidence to demonstrate that post-educational salary does strongly correlate to choice of specialty.62 Further, it has been chronicled by the Council on Graduate Medical Education that “[n]othing affects the location decision of a physician more than specialty. Unfortunately for rural areas, the more highly specialized the physician, the less likely it is the physician will settle in a rural area,”63 a conclusion echoed by Rosenblatt and Hart.64 For some physicians, the costs, professional challenges and/or lifestyle limitations of service in rural or underserved areas may be decisive in their choice of practice location and specialty.65 These elements in turn bear directly on the ease or difficulty of the population accessing medical care.66

Taken together, the above factors paint a picture of more Americans, more insured Americans, and more elderly Americans taxing our health care system in the years to come. In tandem, despite more physicians entering the workforce every day, evidence suggests there may not be enough, in the right specialties, or in the needed geographic locations, to meet all patients' needs. As the final gatekeeper to physician practice in the U.S., state medical boards are an essential ingredient in innovatively connecting physicians with patients.

A second force reshaping medicine, and the expectations around how it is delivered, is the exponential expansion of technology in health care. As in most every other aspect of modern life, the ubiquity of technology has fundamentally reshaped the practice of medicine. Plumbing the foundations of human existence through gene and stem cell therapies, implanting wireless devices that monitor and regulate vitals, operating artificial limbs with thought-controlled pressure sensors, performing simulated and robotic surgery, and accessing electronic health records and health information exchanges are but a few examples of how technology has altered how physicians care for patients. Consider that, as of 2012, more than 13,000 health-related apps were available for download at Apple's Appstore.67 In addition, Healthcare IT News reported earlier this year that “[m]ore than half of people with chronic conditions say the ability to get their electronic medical records online outweighs the potential privacy risks.”68

But perhaps no other aspect of technology has broader transformational potential to provide high quality and more accessible care to patients than telemedicine. Telemedicine is often seen as a remedy to geographic and access barriers by allowing patients the freedom to directly seek out specialists who may practice remotely, facilitating virtual staffing of rural health care facilities, and allowing physicians in centers of excellence to treat and consult on patient care without the time and expense of arranging face-to-face patient visits. Using telemedicine to care for pediatric patients in the ER69, placing technology on board ambulances to facilitate treatment en route to hospitals70, delivering eye care in rural and underserved areas of India71, using Google Glass to display information and digitally record surgical procedures72, and remotely treating hepatitis C virus infection in underserved communities73 are but a few examples of how the advent of technology in patient care across state lines seems destined to rapidly accelerate into the future.

However, a common misconception persists among proponents of the broader use of telemedicine, as a means to facilitate the multistate practice of medicine, that state medical boards oppose the use of technology. Although this is untrue, many are concerned that the unchecked spread of telemedicine may endanger patients. The practice of telemedicine, in whatever the form, is still the practice of medicine, and the same care and protection must be afforded patients whether they are being seen by their community primary care doctor or a highly-focused specialist from across the country. This is the charge state legislatures have given to state medical boards — to ensure that the public in their jurisdictions have access to competent medical care, not unfettered access, lacking the proper accountability.

AS THE FINAL GATEKEEPER TO PHYSICIAN PRACTICE IN THE U.S., STATE MEDICAL BOARDS ARE AN ESSENTIAL INGREDIENT IN INNOVATIVELY CONNECTING PHYSICIANS WITH PATIENTS.

Unfortunately, some critics of state-based medical regulation have sought to portray medical boards as the source of the problem. In some cases, these critics are major corporations that appear to have vested interests in promoting the proliferation of technology in the health care system.74 The American Telemedicine Association (ATA), a leading organization in the advocacy of telemedicine, represents a large number of corporate communications and telehealth interests,75 and the ATA has repeatedly called for Congressional action to preempt state regulatory authority for medicine. In 2011, the ATA launched a website, fixlicensure.org, to elicit public support for this policy position, stating that “requiring health providers to obtain multiple state licenses and adhere to diverse and sometimes conflicting state medical practice rules, is a barrier to progress, quality, competition and economy. This partitioned approach also presents a concern for patient safety as state-by-state licensing and enforcement inhibits tracking down and disciplining bad doctors located in other states.”76

The Chief Executive Officer of the ATA, Jonathan Linkous, has further expounded on the alleged failings of state licensure on a number of occasions, stating that “we estimate it costs about $300 million a year to do extra licenses…that's growing because physicians are increasingly holding multiple medical licenses. It's an access problem.”77 He has been quoted as saying “the patchwork of state-by-state licensing creates a mire of costly red tape and has become an untenable barrier for both providers and patients.”78 Mr. Linkous has further opined “It is wrong to deny a patient health care because of state boundaries and overly cumbersome state licensing rules.”79

As recently as March 10, 2014, Mr. Linkous provided testimony to the Federal Trade Commission on telemedicine and competition.80 In it, he indicated that the ATA did not necessarily oppose state-based regulation, but warned that any proposed alternative must be “accomplished without delay and with a specific timeline included for implementation.” Mr. Linkous's testimony referenced an interstate compact model but detailed ATA's concern that, after 15 years in existence, the Nurse Licensure Compact only operates in 24 states, implying that only a true national solution is acceptable to his organization. Ultimately, Mr. Linkous reprised the tenor of his earlier statements, saying that state-based licensure requirements are “costly and serve as a barrier to fair competition. Licensure costs professionals and the taxpayer hundreds of millions of dollars each year. Separate licensing is without justification for clinical services that do not require face-to-face interactions such as the interpretation of images or peer-to-peer consultations.”81

It remains unclear whether the motivation for organizations such as the ATA to preempt the states in favor of a federal solution for physician licensure is purely financial, or a true belief that the access to be gained through federal action outweighs any collateral damage to patient safety, or a combination of the two. At the very least, such statements demonstrate a fundamental misunderstanding of the vital role of state medical boards by implying that the current system does not work.

STATE MEDICAL BOARDS HAVE BEEN VOCAL SUPPORTERS OF RESPONSIBLY USING TELEMEDICINE TECHNOLOGIES TO EXPAND ACCESS, ESPECIALLY IN RURAL AND UNDERSERVED AREAS.

Still, these voices have been heard by lawmakers. A litany of bills considered or passed by Congress in recent years reflects a trend toward the gradual erosion of states' responsibilities:82

• HR 1832 — the STEP Act. Introduced on May 11, 2011 by Rep. Glenn Thompson (R-PA), this bill expanded the current Department of Defense state licensure exemption for credentialed health care professionals, regardless of where they or patients are located. This expansion includes civilian employees of the Department of Defense, personal services contractors, and other health care professionals credentialed and privileged at a Federal health care institution. The bill became law on December 31, 2011.

• HR 1540 — 2012 National Defense Authorization Act. Introduced on April 14, 2011 by Rep. Howard P. “Buck” McKeon (R-CA), the bill authorized Department of Defense civilian employees and other health care professionals credentialed and privileged at a federal health care institution or location designated by the Secretary of Defense to practice at any location, regardless of where the health care professional or patient are located, so long as the practice is within the scope of authorized federal duties. The bill became law on December 31, 2011.

• HR 6179 — The Telehealth Promotion Act of 2012. Introduced on December 30, 2012 by Rep. Mike Thompson (D-CA), the bill would redefine telehealth services as originating from the site of the treating provider and not the patient. This stance on the location of physician practice has traditionally been viewed as inconsistent with how medicine is defined and as contrary to patient safety.

• HR 6107 — The VETS Act. Introduced on July 12, 2012 by Rep. Charles Rangel (D-NY) the bill would allow any licensed health care professional employed in the VA system, either employed or contracted, regardless of state of licensure, to practice in any facility nationally through the use of telemedicine.

• HR 3077 — The TELE-MED Act of 2013. Introduced on September 2013 by Rep. Devin Nunes (R-CA), the bill would allow for a Medicare provider, licensed in one state, to treat any Medicare beneficiary in any other state via telemedicine without requiring licensure where the patient is located. The bill currently has 58 bipartisan co-sponsors. The ATA has voiced strong support for this bill.83

• The Increasing Credentialing and Access to Streamline Telehealth (ICLAST) Act. Not introduced, this bill authored by Sen. Tom Udall (D-NM) in 2011 would initially create a voluntary national license, issued in tandem with a state license, which would allow physicians to practice across state lines. This system would transition to a mandatory system for physicians accepting Medicare or Medicaid payment, and would eventually be expanded to all types of health care providers. The bill would reserve investigation of complaints and discipline to the states, but the bill does not stipulate how these activities would be paid for.84

There is little to dispute about the many potential benefits of the use of technology in the delivery of health care. Weighing the implications of how our population's demographics and geography drive utilization of health care, or how the economics of medical education and reimbursement shape not merely how doctors practice but in what specialties they choose to practice, also does not dispute the myriad possibilities of technology in serving the health care needs of the public. Finally, it is critical to reemphasize that mere identification of the troubling aspects of legislative proposals or stakeholder critiques should not and does not constitute a de facto indictment of either telemedicine or interstate practice.

State medical boards have been vocal supporters of responsibly using telemedicine technologies to expand access, especially in rural and underserved areas. However, state medical boards must also recognize that the statements of influential critics, proposed—and enacted—federal bills, and changes in technology, demographics and financing, all represent fundamental challenges to how they have operated for decades. By natural extension, should the boards choose not to adapt to changing conditions and expectations, these elements can pose risks to the ability of state medical boards to continue their enduring public protection mission. As Ameringer counsels, “If state medical boards fail to put aside their differences and create a uniform approach to regulating the practice of medicine across state lines, the federal government would have cause to intervene.”85 How then might state medical boards operationalize Ameringer's advice?

Interstate Compacts: A Primer

The purpose of this article is twofold. Thus far its focus has been to set out how state medical boards have historically safeguarded the public through the licensure and discipline of physicians, and to describe how this role is consistent with federal legal and constitutional principles. In response to a rapidly changing landscape within health care prompted by technology, multistate medical practice and evolving consumer expectations, the remainder of this inquiry will center on the concept of an interstate compact for physician licensure, how it has been developed and why it is the ideal mechanism to meet these challenges.

To evaluate the compact mechanism, it is necessary to gain a working understanding of how compacts exist. Broun, Buenger, McCabe, and Masters, in The Evolving Use and the Changing Role of Interstate Compacts: A Practitioner's Guide, provide what may be the quintessential “elevator” speech for the utility of interstate compacts:

[C]ompacts can effectively preempt federal interference into matters that are traditionally within the purview of the states but that have regional or national implications. Unlike federal actions that impose unilateral, rigid mandates, administrative compacts afford states the opportunity to develop dynamic, self-regulatory systems over which the member states can maintain control through a coordinated legislative and administrative process. The very nature of an interstate compact makes it an ideal tool to meet the need of cooperative state action…86

Multiple factors contribute to the merit of interstate compacts as a means of collective state governance. First, despite the relative obscurity of interstate compact law in the field of jurisprudence, its bedrock lies squarely in the U.S. Constitution, and the forerunners of interstate compacts even precede the nation's founding. The Constitutional authority of compacts uniquely suits them to resolving statutory and regulatory differences between states, and they have been successfully applied across the gamut of regulation. Furthermore, interstate compacts have adapted over time to address progressively more challenging public policy issues. Finally, in contrast to anxiety over a perceived erosion of state sovereignty, the long history of compacts demonstrates that the benefits for states far outweigh any loss of authority.

THE CONSTITUTIONAL AUTHORITY OF COMPACTS UNIQUELY SUITS THEM TO RESOLVING STATUTORY AND REGULATORY DIFFERENCES BETWEEN STATES, AND THEY HAVE BEEN SUCCESSFULLY APPLIED ACROSS THE GAMUT OF REGULATION.

Ironically, interstate compacts are widely used in American government and yet are not well understood by the general public.87 At the same time, interstate compacts are one of the oldest forms of cooperative government. As with the history of medical regulation in the United States, the history and use of compacts dates to colonial times, where they were used for boundary settlement negotiations where land charters were vague or incorrect. When appointed parties forged an agreement, it was then submitted to the Crown for approval.88 Indeed, in the 1838 United States Supreme Court case Rhode Island v. Massachusetts, Justice Baldwin, writing for the Court, hearkens back to “the Crown of England to the Plymouth Company in 1621; to Massachusetts in 1629; to Rhode Island in 1663; the new charter to Massachusetts in 1691; together with sundry intermediate proceedings of the council of Plymouth.”89 This framework remains the basis for interstate compacts today.

Compacts are a hybrid of contract law and statutory law that states are specifically authorized to use under the “Compact Clause” of the U.S. Constitution (Article 1, Section 10, Clause 3):

“No State shall, without the Consent of Congress, lay any Duty of Tonnage, keep Troops, or Ships of War in time of Peace, enter into any Agreement or Compact with another State, or with a foreign Power, or engage in War, unless actually invaded, or in such imminent Danger as will not admit of delay.” (emphasis added)90

Compacts are unique in American governance in that they rely on the premise of states' rights, yet they exist between state and federal authority. Because states enter into a contractual relationship with other states via the passage of state legislation, once entered, the terms of a compact cannot be changed unless agreed to by all the member states of the compact.91 As a result, the authority of compacts supersedes that of state laws, rules, courts, and even state constitutional provisions, unless specifically exempted.92

The question is often asked of whether the Compact Clause requires Congress to affirmatively consent to every compact, or whether the lack of explicit consent is an obstacle to establishing a compact. Although it might imply this, according to the Council of State Governments, “[t]o clear up the ambiguity of the Compact Clause, the U.S. Supreme Court in Virginia v. Tennessee held that Congress must approve only two types of compacts: those compacts that alter the balance of political power between the state and federal government; or those compacts that intrude on a power reserved to Congress.”93 Others have similarly noted that Congressional consent may be implicit or explicit, depending on whether the compact would have a bearing on the balance of federal/state powers as laid out in the Constitution.94,95,96 Congress's consent to an interstate compact can be either prospective or after a compact has already been established. Congress also has the authority to deny or withhold its consent to any interstate compact that it believes would violate either the federally-enumerated powers test or the federal-state balance of power test. However, a threat of withdrawal or denial is, practically speaking, extremely remote.97 Indeed, especially in regard to the regulation of physicians, this article has laid out multiple reasoned arguments for it to remain within the domain of the states.

COMPACTS ARE A HYBRID OF CONTRACT LAW AND STATUTORY LAW THAT STATES ARE SPECIFICALLY AUTHORIZED TO USE UNDER THE ‘COMPACT CLAUSE’ OF THE U.S. CONSTITUTION (ARTICLE 1, SECTION 10, CLAUSE 3).

A final note regarding the issue of Congressional Consent relates to what becomes of compacts, and the interstate organizations created by them, when formal consent is given. The answer, in operational terms, is absolutely nothing. Only in one respect does having formal consent “transform” the compact into federal law. As Justice Brennan wrote for the majority in the 1981 Supreme Court case Cuyler v. Adams, “[b]ecause congressional consent transforms an interstate compact within this Clause into a law of the United States, we have held that the construction of an interstate agreement sanctioned by Congress under the Compact Clause presents a federal question.”98 Thus, unlike any other type of federal legislation, compacts with consent are “federalized” only in that they fall exclusively within the jurisdiction of federal courts and enjoy protection against attacks on Constitutional grounds.99

An indication of the true significance of interstate compacts is that disputes arising from compacts are one of the few areas where the United States Supreme Court may exercise original jurisdiction.100,101 As a result, there is an important body of U.S. Supreme Court case law related to interstate compacts, including some of the most important cases the High Court has heard. One such case, relating to the enforceability of interstate compacts, is West Virginia ex. Rel. Dyer v. Sims in 1951. The case involved a dispute in West Virginia as to whether or not a payment of $12,250 to support the Ohio River Valley Water Sanitation Compact represented an illegal (per West Virginia's Constitution) delegation of the state's police power to other states and the federal government. Edgar B. Sims, the state's auditor, refused to issue the warrant to pay for the compact's expenses.102

Writing the majority opinion, Justice Felix Frankfurter found the compact to be a “conventional grant of legislative power” and that the language of the compact, in which states agree to appropriate funds for its administrative expenses, did not represent a conflict with the West Virginia Constitution.103,104 Justice Reed, in a concurring opinion specifically noted that “under the Compact Clause…the federal questions are the execution, validity, and meaning of federally approved state compacts. The interpretation of the meaning of the compact controls over a state's application of its own law through the Supremacy Clause, and not by any implied federal power to construe state law.”105,106

IT MUST BE ACKNOWLEDGED THAT, FOR SOME, THE NOTION OF ‘GIVING’ AWAY THE AUTHORITY OF STATE BOARDS TO THEIR ASSOCIATES IN OTHER STATES, OR TO AN INTERSTATE COMMISSION, IS DISQUIETING.

An especially important feature of interstate compacts, for the purposes of this discussion, is the evolution of compacts in the 20th century to include governmental organizations for ongoing regulation. This occurred as a result of interstate compacts not having the necessary tools to respond to changing conditions and complexities, as well as not being able to effectively enforce the provisions of compacts with member states. The New York/New jersey Port Authority, created by a bi-state compact in 1921, was significant in that it was the first interstate government agency created in the western hemisphere and was the first interstate agency created by interstate compact.107 In more recent times, ongoing regulatory agencies have become fixtures in interstate compacts. In some cases, existing compacts have even been renegotiated to incorporate interstate commissions, such as with the Interstate Compact for Adult Offender Supervision, the Interstate Compact on Juveniles, and the Interstate Compact for the Placement of Children.108

It must be acknowledged that, for some, the notion of “giving” away the authority of state boards to their associates in other states, or to an interstate commission, is disquieting. That state-specific laws or rules may be overridden by an interstate compact mechanism gives rise to visions of “big brother” for skeptics. There is an undeniable relinquishing of some individual board autonomy to participate in a compact. Further, because the compact is intended to create uniform standards and processes across all states that enact it, it cannot by definition accommodate all the individual regulatory nuances of any given member state. However, it is also undeniable that, at present, state boards have no true jurisdiction over physicians who are licensed elsewhere, even when it is their states' patients who are harmed by them. State laws do not give boards the ability to reach beyond those governed by their licensing statutes to investigate or take action on physicians providing unsafe or improper care from afar. The compact mechanism, however, gives states the authority to collectively act in a way that individual states, relying solely on their individual authority, cannot. Broun, Buenger, McCabe, and Masters further evaluate the trade-offs of individual versus collective state authority:

As for concerns related to the loss of individual state sovereignty, there is no question that the parties to interstate compacts necessarily give up the right to unilaterally control the joint agencies they create. But when measured against the nature of congressional intervention and the loss of authority that can result from federal preemption of a particular field, the state legislative and regulatory control that states jointly retain under interstate compacts is usually preferred by states. Viewed through this lens, the decision to empower an interstate agency is more likely to be seen as a welcome protection of ‘collective state sovereignty’ than it is to be resisted as an unacceptable sacrifice of individual state authority.109

Interstate compacts have been widely applied in the history of American government, with more than 200 active compacts, including 22 truly national ones. The average U.S. state is a party to 25 interstate compacts.110 They have evolved in their form and application throughout American history and are effectively employed for purposes as varied as boundary disputes, resource management, taxes, insurance, criminal justice, health care, education, emergency management, transit, and economic development. Indeed, as Supreme Court Justice Felix Frankfurter noted, “that a legislature may delegate to an administrative body the power to make rules and decide particular cases is one of the axioms of modern government.”111 More than sufficient evidence exists to reasonably infer that compacts can be just as effective for the regulation of physician practice across state lines.

INTERSTATE COMPACTS HAVE BEEN WIDELY APPLIED IN THE HISTORY OF AMERICAN GOVERNMENT, WITH MORE THAN 200 ACTIVE COMPACTS, INCLUDING 22 TRULY NATIONAL ONES. THE AVERAGE U.S. STATE IS A PARTY TO 25 INTERSTATE COMPACTS.

The Interstate Medical Licensure Compact — Origins, Development, and Key Themes

The antecedents to development, or even consideration, of an interstate compact for physician licensure began some years ago. The FSMB has been engaged in activities for a considerable period to promote expedited licensure and to facilitate practice in multiple states. It is also clear from the above discussion that both Congressional activity and stakeholder interest in telehealth and multi-state practice were well underway by 2012.

For the purposes of this discussion, however, we will focus on the most immediate events, beginning with a 2012 resolution to the FSMB House of Delegates from the Maine Board of Licensure in Medicine. Resolution 12-4, dubbed the Platinum Standard Model, directed the Federation to “convene and charge Member Boards with defining and developing a set criteria of qualifications for a Platinum Standard Certification, and a system to allow State Medical Boards to make rapid licensing available to the highest caliber of licensed physicians by September 1, 2012.”112 The intent of the resolution was that states, in collective examination of their licensing standards, could establish a “highest common denominator” of requirements and, if a physician were to qualify for the Platinum Standard and be licensed by one state, other coordinating states could then license him or her based on that distinction, without further evaluation.

Resolution 12-4 was initially defeated in the House of Delegates, in part based upon apprehension that such a designation would connote a two-tiered system of physicians. However, further floor action revived the resolution in a different form, referring the question of a Platinum Standard to the Board of Directors for study and a report back to the House of Delegates in 2013, which passed the House.113 The FSMB Board of Directors subsequently referred the matter for consideration to the FSMB Advisory Council of Board Executives, a standing group of state medical board executive directors.

The Advisory Council engaged in extensive debate on the Platinum Standard Model at its August 2012 meeting, yet it came to the same subdued conclusion as had the FSMB House of Delegates. Nevertheless, the Council remained in clear consensus that, as Resolution 12-4 stated, “a national trend [was] rapidly emerging, whereby state and federal policymakers [were] questioning the validity of the current state-based licensure system.”114 This recognition prompted the Council in that meeting toward exploration of a number of other alternatives. This included an initial conceptual discussion of a multistate license, possibly offered through an interstate compact.

In order to further delve into these alternatives, the FSMB, in coordination with Administrators in Medicine, hosted a meeting in January 2013 for the purpose of examining existing state licensure processes and exploring innovative licensure approaches that could facilitate multistate practice. The meeting, which included representatives of 48 of the 69 licensing boards in the United States and its territories, was intended to move forward a more concrete discussion of one or several models that boards could pursue to better accommodate the practice of medicine across state lines, including via telemedicine.

Crady DeGolian, Director of the National Center for Interstate Compacts with the Council of State Governments, was one of the featured speakers at this meeting and provided the audience with an overview of interstate compacts. It was the first time that a detailed examination of interstate compacts explicitly entered the conversation, and although the participants did not leave the meeting having coalesced around any single methodology, the notion of an interstate compact for physician interstate practice emerged from the meeting with substantial support.

Not long afterward, the State of Wyoming Board of Medicine submitted to the FSMB, for consideration by the House of Delegates at the 2013 Annual Business Meeting, Resolution 13-5, which read in part:

Therefore, be it hereby resolved, that the FSMB convene representatives from state medical boards and special experts as needed to aggressively explore the development of an Interstate Compact to facilitate license portability hereinafter known as the Medical License Portability Interstate Compact project, and be it further resolved that the Medical Licensure Portability Interstate Compact project be initiated no later than July 2013.115,116

The passage of Resolution 13-5 by the FSMB House of Delegates at the 2013 Annual Business Meeting is extraordinary in at least two respects. First, despite no shortage of membership discomfort about a loss of state authority, about whether a compact was a suitable scheme for regulating physicians, and about a general lack of familiarity with compacts as a governing tool, the Resolution passed the House unanimously, and with virtually no discussion on the House floor. Second, given that discussions about how to facilitate physician mobility and practice across state lines has divided the regulatory community since the foundation of the FSMB, that the membership should unite in singular fashion behind such a proposal, even merely to study its feasibility, is remarkable.

GENERALLY, PARTICIPATION IN AN INTERSTATE COMPACT CREATES ANOTHER PATHWAY FOR LICENSURE, BUT DOES NOT OTHERWISE CHANGE A STATE'S EXISTING MEDICAL PRACTICE ACT.

To comply with the Resolution's timelines to begin work by July 2013, the FSMB convened two developmental meetings in June and September 2013. During the two two-day sessions, representatives from a cross-section of medical and osteopathic boards conferred and sometimes actively debated the principles and goals of what a compact might accomplish and what the organization of a compact system might resemble. The groups extensively probed the details of how a compact might be financed, how licenses might be issued, what qualifications might be necessary to participate, and what role an interstate commission would play. The representatives gave great thought to how discipline would be handled, both with respect to licenses issued by the physician's primary state of practice and those issued by other states in the compact, and they weighed how to enhance data sharing amongst the compact states. Finally, the groups carefully considered the need and methods to communicate with state medical boards, stakeholders and partners within the House of Medicine, and the broader public about how this complementary process would balance patient protection with changes in medical practice. The deliberations of the June and September meetings resulted in eight foundational principles upon which a compact would be structured:117

• Participation in an interstate compact for medical licensure will be strictly voluntary for both physicians and state boards of medicine.

• Generally, participation in an interstate compact creates another pathway for licensure, but does not otherwise change a state's existing Medical Practice Act.

• The practice of medicine occurs where the patient is located at the time of the physician-patient encounter and, therefore, requires the physician to be under the jurisdiction of the state medical board where the patient is located.

• An interstate compact for medical licensure will establish a mechanism whereby any physician practicing in the state will be known by, and under the jurisdiction of, the state medical board where the practice of medicine occurs.

• Regulatory authority will remain with the participating state medical boards, and will not be delegated to any entity that administers the compact.

• A physician practicing under an interstate compact is bound to comply with the statutes, rules and regulations of each compact state wherein he/she chooses to practice.

• State boards participating in an interstate compact are required to share complaint/investigative information with each other.

• The license to practice medicine may be revoked by any or all of the compact states.

PARTICIPATION IN THE COMPACT SHOULD NOT ADVERSELY AFFECT STATE MEDICAL BOARDS EITHER BECAUSE OF REDUCTION IN LICENSING REVENUE OR AN INCREASE IN FEES.

Following the groundwork and consensus-building in the June and September meetings, which created a clear set of parameters around which to construct a compact, a small drafting team met with FSMB staff in November of 2013 to craft and refine the provisions of a draft document. In drafting the compact, the drafting team identified several essential themes to address:

• Participation in the compact should not adversely affect state medical boards either because of reduction in licensing revenue or an increase in fees. The compact is designed to act as a clearing-house, ensuring that licensing fees are collected and distributed to the appropriate states. Moreover, those fees would be set, as all fees currently are, by the states, and not by an interstate commission. All licensees would have to pay the fees set in those states in order to obtain and maintain a license via the compact, just as with licenses currently obtained via traditional methods.

• Participation in the compact should not afford a physician an opportunity, under the guise of multi-state practice, to elude discipline, nor should it impinge on states' ability to take action against their licensees. At the same time, participation in a compact should facilitate more effective disciplinary action than the present system of states reporting to one another, and it should foster protection of the public across all states. Under the compact, an interstate commission would not have disciplinary authority, but would, as with fees, serve as a clearinghouse for disciplinary information to states. The compact would also provide states the flexibility of whether to pursue action against a licensee or not when another state already has, except in the most serious of cases.

• State boards participating in a compact should be aware of the physicians who are, or are capable of, practicing within their borders. It is recognized as critical to boards' patient safety missions that they must not only have jurisdiction over physicians practicing in their states, but they must have clear knowledge of their physician population in their states. Under the compact, all states, when selected by a physician who is deemed eligible by their principal state, would issue a full license to that physician, creating a clear regulatory linkage. Moreover, states will report to one another, again, using an interstate commission as a hub, any changes in physicians' licensing or disciplinary statuses.

• The interstate compact contains mechanisms, such as rulemaking authority, to allow member state boards to clarify important areas of policy. Because the compact itself is essentially a multi-state contract enacted as legislation, by necessity its provisions must remain broad. When substantive changes to a compact are necessary, member states must go through the excruciating process of amending the statutory language in every member state, with the amended provisions not taking effect until every state has enacted the change. Consequently, rulemaking authority is essential for addressing many operational details of the compact. A prime example of this is the issue of requiring federal background checks via fingerprint as part of the licensure process. Likely to be a subject of rulemaking by an interstate Commission, to explicitly require in the compact that such checks be performed by fingerprinting could preempt new future methodologies that might be even more effective.

• States participating in a compact will have regulatory responsibility for an Interstate Commission, not the other way around. Participation in the compact requires state legislatures' and governors' authorizations, but this does not equate to a ceding of authority to a “superboard.” As noted above, state boards will collectively comprise an Interstate Commission and oversee its operation. This governance of the compact by a Commission is needed due to the complexity of medical practice and the ongoing interstate coordination needed to maintain the compact's currency, but it is administrative in nature and does not extend to direct licensure or discipline of any physician.

• States should not have to pay to participate in the compact. Undue concern has been raised about whether an interstate compact could require states to pay dues or fees as cost of that participation. There is no intention to charge states a fee to join or remain in the compact; those developing it specifically envision that an interstate commission would be financially self-supporting through physician fees, as is the case with most state medical boards currently. That said, there are important reasons that the draft compact contains language specifically authorizing direct state financial support. The compact, and an interstate commission, would exist as instruments of the states that join it. It is their authority they are expressly giving to the compact, and with that goes the ultimate fiduciary responsibility for that governmental entity. Without the member states underwriting its authority, an interstate commission might not be considered a government organization for tax purposes. Moreover, those who would serve on the interstate commission might not enjoy the same qualified immunity that they now enjoy as members of their state boards. It does not mean, however that your colleagues that crafted the proposed interstate compact, visualized in any way that boards or states would have to “pay to play.”

• The full utility of an interstate compact should be used to develop additional tools to assist boards in their licensing and regulatory responsibilities. Because of the uniqueness of the authority of compacts, they allow states to innovatively address problems they share. One such area for state medical boards is in the area of out-of-state investigations. The proposed compact contains language intended to empower the sharing of investigative information between states and still maintaining the proper confidentiality. Joint investigations between state boards, the sharing of investigative information, and the enforcement of subpoenas across state lines are all examples of what could be accomplished with an interstate compact for physicians.

The Interstate Compact: The Better Alternative for State Medical Boards

Despite evidence of the long history of state board regulation of medicine, and the mandate from their state legislatures to do so, state boards cannot rely merely on those facts as a defense of the status quo. As a strategy, they are certainly necessary elements, but are not by themselves sufficient. However, an interstate compact is the optimal policy response for boards, for a variety of reasons:

1. Compacts, as noted above, are as old as the. Constitution itself, and have been used throughout American history. Over 200 interstate compacts currently exist, including 22 that are truly national in membership. While the concept of compacts may be novel within the medical community, they are well-tested and operate with great effectiveness across the spectrum of government.

2. Former Wyoming Governor Jim Geringer spoke at the January 2013 FSMB meeting about his preference for interstate compacts as a means for states to collectively solve their policy problems. In January 2014, sixteen U.S. senators (including one MD) wrote to the FSMB and expressed their appreciation for the work of the state boards in exploring development of an interstate compact, saying “[a]s you continue the development process, we would like to express our support for an interstate compact to provide a solution to expedite the process whereby physicians can be licensed in multiple states and practice telemedicine in a safe and accountable manner.”118 Elected officials at both the federal and state levels, including Democrats and Republicans, liberals and conservatives, understand the role of interstate compacts and broadly support their use in lieu of federal intervention. And, as noted above, development of an interstate compact by states forestalls the uncertainties that may come with federal mandates.THE PROPOSED COMPACT CONTAINS LANGUAGE INTENDED TO EMPOWER THE SHARING OF INVESTIGATIVE INFORMATION BETWEEN STATES AND STILL MAINTAINING THE PROPER CONFIDENTIALITY.

3. Some have asserted that we can achieve many of the same goals without such drastic steps, that states can respond to these forces in more organic and less formal ways. I counter-assert that if this were so, states would have already taken the initiative. Today's state regulation of physicians reflects an evolutionary process, for which boards deserve credit; that said, absent an imperative to weigh the merits of an interstate compact, it is fair to ask whether boards would still be doing so. For those seeking a substantive change in how state boards operate, the creation of an interstate compact represents a good faith effort to be responsive to their needs yet safeguard the public.

4. Given that state medical boards are contemplating an interstate compact, the opportunity exists via the compact mechanism to make important process improvements that would be challenging for states to enact individually. Allowing for boards to jointly investigate licensees and to share data between boards during the investigative process are two key examples. In addition, an interstate compact would streamline the licensure process for qualifying physicians by eliminating the need to reproduce documents multiple times for different jurisdictions once they have been primary-source verified by another state. Interstate compacts serve ideally to allow states to focus more broadly in problem resolution without resorting to federalization.AN INTERSTATE COMPACT WOULD STREAMLINE THE LICENSURE PROCESS FOR QUALIFYING PHYSICIANS BY ELIMINATING THE NEED TO REPRODUCE DOCUMENTS MULTIPLE TIMES FOR DIFFERENT JURISDICTIONS ONCE THEY HAVE BEEN PRIMARY-SOURCE VERIFIED BY ANOTHER STATE.

5. There is an important distinction between the harmonization of state standards and the ceding of state authority to a uniform national standard. An interstate compact would foster more consistent standards across the country in how state boards carry out their licensure and discipline activities, but it would not usurp that state authority to an interstate compact, a federal bureaucracy, or any other entity. In fact, because compact terms cannot be altered except by unanimous consent of the member states, compacts offer a remarkable degree of constancy. Only through the rulemaking process of an interstate commission can changes be implemented. Because the interstate commission concept is, as yet, an abstraction, it is an easy target for skeptics. However, once implemented, the commission will be comprised of members of state boards, not strangers. There is no reason to assume that fellow board members and executives from other states, serving on such a commission, would exercise any less care and caution in administering the compact than would the skeptics themselves.

6. Consider the premise that, due to the combined effects of federal action and the explosion in the interstate practice of medicine (either in person or by telemedicine), health care is becoming a type of interstate commerce; consequently, it merits asking whether it could eventually subject it to the Commerce Clause. If so, the provision of health care could become subject to either “field preemption” where federal regulation is already sufficiently pervasive to crowd out state regulation, or “conflict preemption,” where state and federal regulation are inconsistent or state law essentially impedes the intent of Congress.119

7. Some national licensing schemes that have been discussed could enable some or all licensing at the federal level, yet leave the matter of physician discipline to the state boards.120 Given that the essential task of public protection through enforcement is paid for through licensing and renewal fees, this could become an unfunded mandate, seriously impairing the ability of state boards to take appropriate and timely action when needed.121 If, as noted above, some partial preemption of licensure was coupled with a method of allocating funds back to the states, there is no assurance that the funds will not come with policy strings attached. Finally, investigating and imposing discipline, at the state level, on a national license could prove jurisdictionally challenging, as would the question of coordination of federal licensing with state disciplinary actions.122,123

8. A federal system would necessarily require a. significant new bureaucracy, and it is unclear whether or how such an organization could take advantage of the significant existing expertise and board infrastructure within the states. While the federal government does have some limited experience overseeing physicians in its systems, they are still licensed by and accountable to state boards. The federal government's experience is also limited to closed systems such as the Department of Defense and the Veterans Administration, where physicians are employees or contractors of the government and see only defined populations. According to Gilman, “there is no federal agency with the authority, experience, and expertise to perform the various licensing functions undertaken by the states and it would not be trivial to create one.”124