Licensing 101

Licensing is an essential piece in the healthcare delivery puzzle. Without it, medical providers can’t practice and healthcare facilities can’t operate. Basically, it’s what makes the healthcare world go round. Licensing is a hot topic with the boom in telehealth adoption, so it’s more important than ever to stay current on the conversation. In this blog post, we outlined all things licensing to get you caught up, so let’s begin this crash course on Licensing 101.

Licensing deep dive

Let’s start with the basics. What is licensing? A definition provided by the Association of State and Territorial Health Officials states “licensing is the formal recognition by a regulatory agency or body that a person has passed all the qualifications needed to practice that profession in that state”. Consider it a stamp of approval that a clinician is qualified to treat patients in the state they hold their license in.

The process for obtaining a license is called “licensure” and it is mandatory for any and all medical professionals to practice in the United States. Regular license renewal is also required, but the process varies by state. The majority of states require healthcare providers to renew their license every 2 to 3 years.

Failure to renew your license by the set expiration date can result in a variety of consequences also dependent on the state and the type of license. More than likely, you will have to pay lapsed and penalty fees when moving to renew past the due date. It’s good to note that once your license expires without renewal, you are no longer allowed to practice medicine until it is reinstated.

Being licensed in the healthcare industry means meeting the agency’s predetermined criteria based on the position you are applying for and the healthcare sector you are going to practice in. Let’s cover a few of the most common jobs in the industry and the requirements to receive licensure for each.

Nursing licensure

Did you know that nursing is the largest healthcare occupation in the industry? When you think about it, this isn’t very surprising. There are many different types of occupations that live underneath the nursing umbrella. Those tiers include:

• Certified Nursing Assistants (CNAs): Many nurses use this role as a starting point in their career. Technically, CNAs are not considered nurses but they are on the frontline between medical staff and patients. They assist their patients in daily activities and are often personal caregivers in nursing homes and residential care facilities. To become a Certified Nursing Assistant, a state-approved education program must be completed and an exam must be passed to be state-certified and earn the CNA title. This role requires a certification not a license.

• Licensed Practical Nurse (LPN): Licensed Practical Nurses monitor patient health and administer basic care to patients, such as inserting catheters and taking their blood pressure. To be recognized as a LPN and receive a license, a Practical Nursing Diploma program must be successfully completed and the National Council Licensure Examination (NCLEX-PN) must be passed.

• Registered Nurse (RN): Registered nurses are what people typically think of when they think of the nursing profession. Their roles include administering medicine, performing diagnostic tests and collaborating with doctors. To become a RN, an Associate’s Degree in Nursing (ADN) or a Bachelor’s of Science in Nursing (BSN) is required depending on the type of work you will be performing. From there, the National Council Licensure Examination (NCLEX) must be passed in order to be licensed. Some states may have additional requirements to begin licensure.

• Advanced Practice Registered Nurses (APRNs): Nurses who get their Master of Science in Nursing (MSN) can become Advanced Practice Registered Nurses. APRNs can do all the tasks an RN can do plus more extensive tasks such as referring patients to specialists and diagnosing and treating illnesses. To reach the APRN level, a RN license is required and a BSN degree is preferred. After graduating from the MSN program, a national certification exam is commonly required in your specialized area before receiving your APRN certification.

Physician licensure

There are two different types of physicians in the medical field and they require slightly different licensing paths. All physicians must meet a set of qualifications to enter the profession including graduating from medical school, postgraduate training and passage of a comprehensive national medical licensing examination. The test physicians must take before being able to practice is what differentiates the two licensure paths.

Physicians who have obtained an MD, or Doctor of Medicine, take the United States Medical Licensing Examination (USMLE). Physicians holding a DO, Doctor of Osteopathic Medicine, degree can also take the USMLE but typically complete the Comprehensive Osteopathic Medical Licensing Examination (COMLEX-USA) instead. Once the physician has passed either of these two examinations, they are able to apply for a license to practice.

The licensing process

The licensing process can be complex and varies from state to state. Currently, physicians are required to complete individual applications for each state they wish to practice in, this includes virtual care delivery.

When applying for a state license, you will have to submit your education and graduate training to be reviewed. Your application will also include exam scores, references and current and past licenses (if you have any). Most state licensing processes and procedures are similar so to save time, have copies of application materials to reuse.

One thing that is the same across all states is proof of completion of the United States Medical Licensing Examination (USMLE), a 3-step process that assesses the physician’s ability to apply the knowledge, concepts and principles to provide safe and effective patient care.

After submitting the completed application for a state license, the average time it takes to obtain that license is 1 to 3 months. This can vary depending on the state you are applying for or whether the medical school you graduated from is outside of the United States. Once you receive your license, you are able to begin practicing in that state.

Risks of non-compliance

It’s the provider’s responsibility to get licensed in the states they want to practice in but it’s the healthcare facility’s job to verify that licensing before they start practicing. This is called credentialing. All providers need to go through the credentialing process before they start at a healthcare facility to ensure they are who they say they are.

If the facility does not go through this process, they risk falling out of compliance. Should this happen, your healthcare facility could face several harmful outcomes, including:

• Fines and penalties: Let’s look at some numbers. A study from the Ponemon Institute showed that the cost of non-compliance is about 3.5 times higher than compliance. To break it down in dollars, it was an average of $222 per employee for compliant organizations and $820 per employee for non-compliant organizations with an average of $9.6 million in costs for non-compliant organizations. That’s a lot of money for something that is avoidable.

• Lawsuits and settlements: If a physician hasn’t been credentialed and they aren’t licensed to practice, medical malpractice could occur and result in a big lawsuit. This would not only fall on the ‘physician’ but it would also hurt the hospital, clinic or telehealth company they are employed by.

• Loss of business: Non-compliance is a big deal, especially if it’s because a physician practicing at your facility is not licensed. This puts the patient's safety at risk and no patient wants to worry about that when going in for a check-up.

Ensuring every healthcare professional that is treating your patients is licensed in the state you’re operating in will help you steer clear of falling out of compliance. Although it takes some time and costs money, it’s nothing compared to what you will have to face if you don’t credential every healthcare provider you hire. If you choose not to hire and train a full-time credentialing expert internally, there are organizations out there for you to lean on and offload those duties to. This also brings added peace of mind in successful completion.

Impact of telehealth on licensing

With the growing adoption of telehealth and the increase in patients tapping into virtual care, licensing has become a major topic in the healthcare industry. It raises the question, “Does a virtual care physician have to be licensed in every state they see patients in?”

When the pandemic was showing no signs of slowing down, many states agreed to recognize out-of-state licenses for virtual visits. This is referred to as licensure reciprocity. We will go into more details about this model in the next section. Additionally, the Centers for Medicare and Medicaid Services waived the requirement that a clinician needs to be licensed in the state where the patient is located. But, all of these changes were temporary and most states have returned to the state-by-state licensing model.

Although it may seem redundant to have to apply for a license in each state you practice in, it doesn’t come without reasoning. Each state has its own healthcare laws and regulations that physicians must abide by and stay educated on in order to keep their patients and their practice safe.

Looking ahead

With the rising value of telehealth, many are looking to the federal government to set some sort of long-term telehealth policy that would provide options for tackling the licensing dilemma. Four models that are standing out currently were outlined by HealthIntelligence in a recent article.

Interstate licensure compacts

An option that was introduced before the pandemic are interstate licensure compacts. A licensure compact is a streamlined process for providers to get licensed in more states, more efficiently. The largest and most well-known compact is the Interstate Medical Licensure Compact formed by the Federation of State and Medical Boards (FSMB) in 2017. It is slowly getting its feet off the ground with 25 active states, as of July 2021. Many more states are looking to join the compact but haven’t officially made the decision, while others have announced they will not be joining or aren’t considering it.

While it does make it easier to get licenses in the states that have joined the compact, it still upholds the authority of each state's medical board in regulating and approving providers to treat their patients.

Licensure reciprocity and the nursing model

As referenced earlier, this model was introduced during the height of the pandemic. It allowed states to recognize medical licenses issued by other states so providers could treat residents outside of their licensure. Many states issued the licensure reciprocity model for the duration of their public health emergency. As mentioned, most states are no longer in a public health emergency thus removing licensure reciprocity from their healthcare system.

This model was first introduced by the nursing profession in the Nurse Licensure Compact (NLC) supported by the National Council of State Boards of Nursing. Nurses are often called on to treat patients or interact with providers in other states, so the compact fits nicely into that profession. But many people view the portability model as unfit for doctors or specialists because there are different state requirements for obtaining a license.

Now, the NLC isn’t accepted by all states. As of May 2021, 33 states had joined the compact and 13 others are in the process of or are considering joining. Four states have gone public and announced they currently have no plans in joining the compact.

Licensure reciprocity seems like an ideal solution for telehealth practices but as of now, it seems the system is slowly moving away from this model as more and more states remove their public health emergency status.

One license for everyone

The option that is the least likely but seems to be the most popular in the medical community is for all healthcare providers to have one license, a national license, that allows professionals to practice anywhere in the country.

Don’t worry! We didn’t forget to include the fourth option and it’s looking like it is going to be the option the federal government will be going with as of now. It’s leaving licensing up to each individual state, just as it has been.

Although there’s much hope and a variety of fresh ideas out there to solve the licensing dilemma, it’s not looking like there will be a national solution anytime soon. Don’t feel disappointed yet though. We may have the perfect solution for you to staff and scale your telehealth services nationwide - partnering with OpenLoop.

Powering clinician licensing services

OpenLoop has a full team of dedicated licensing and credentialing experts who adhere to the National Committee for Quality Assurance (NCQA) standards. This means that any client who partners with us has access to our experienced team and can offload the headaches of staffing, licensing, credentialing and payer contracts. Get rid of the unnecessary stress and save time and money while you’re at it!

Given our long-standing relationships with providers across the nation, we’re able to rapidly scale up clinicians to support your patient demand, while also ensuring they’re aligned to your company’s unique culture, knowledgeable about the patients you support and tech-savvy enough to run your telehealth visits seamlessly.

Our team works around the clock to expand our network of clinicians to fulfill our mission of delivering healing anywhere. We can’t forget to mention that we service all 50 states and have over 6,500 clinicians in our network ready to support your organization. Interested in getting an all-access pass to our 24/7 team and vast clinician network? Let’s set up a time to chat!