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COVID-19: HHS Announcement Sets Stage for Innovation and New Business Models

Key Points:

  1. HHS is changing the interstate medical licensure rules to support providing care across state lines.
  2. Interstate Medical Licensure Reciprocity is not new, but has never been adopted because of protectionist tendencies.
  3. Credentialing is a critical step in ensuring patient safety. New rules will not remove the need for streamlined exchange of physician credentialing information.
  4. The HHS announcement will likely catalyze telemedicine services across the country.

On Wednesday this week Vice President Pence announced that HHS is issuing a regulation to permit doctors to practice across state lines.

“With regard to medical personnel, at the President’s direction, HHS is issuing a regulation today that will allow all doctors and medical professionals to practice across state lines to meet the needs of hospitals that may arise in adjoining areas,” Pence said.

Interstate medical licensure reciprocity is not a new concept (Hashed worked with the State of Illinois on a solution for this problem in 2017). For years, there have been compacts that, in theory, streamline licensure across state lines. However, these efforts have not achieved widespread adoption. The HHS announcement will immediately catalyze telemedicine services across the country and allow clinicians to provide remote services wherever needed.

Previously, the requirements for practitioners to be licensed in the state where services are provided created a self-imposed barrier to telemedicine. These licensing restrictions limited the ability to target specific communities due to the cost and time required for burdensome licensure activities. Now the costs previously associated with obtaining and renewing those licenses can be reinvested to both enhance those firm’s overall offerings and greatly reduce the friction involved in scaling their businesses.

The COVID-19 crisis is creating pockets of demand for clinicians in specific geographies where the disease is prevalent. These changes in regulatory policy now allow telemedicine firms to address that demand directly. We are also seeing demand for retired physicians to renew their license and assist in providing basic general practitioner activities to support demand for care. Both the relaxation of licensing restrictions and the expansion of reimbursement rules to align more closely with in-person care, creates the incentives needed to grow these services accordingly. The crisis may finally be the catalyst needed for adoption, unleashing telemedicine business models that have until now been limited.

“For too long, we have forced credentialing to be performed in a way that requires credentialing professionals to resort to dated, time-consuming methods of performing their work.” states Matt Cox, Chief Financial Officer of Spectrum Health.

In the coming weeks we may see additional changes to regulations regarding interstate medical licensure and credentialing (license, employment history, privileges, and other data). These changes are good and should fundamentally improve care by enabling telemedicine and other decentralized business models. Further, in light of this crisis, other aspects of the industry where similar impedances to innovative care delivery models are likely to be examined and removed.

Healthcare practitioners will always need to be credentialed. This process ensures that anyone seeking to deliver patient care can do so competently and safely. The likely rapid expansion of telemedicine services will consequently require a parallel expansion in work related to that growth. At this time of great need and creativity, innovation in this area should not be overlooked as well. As the walls come down, the demand will grow for new infrastructure that improves how credentials are shared amongst organizations responsible for care.

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