Telehealth credentialing across state lines — the IMLC, PSYPACT, and what payers actually require

Telehealth expanded the geographic reach of every practice that adopted it. The credentialing infrastructure did not expand to match. A provider seeing patients in multiple states via telehealth needs to be licensed in each state where those patients are located — and enrolled with payers in each of those states — before a billable telehealth service can be delivered.

The license compact programs (IMLC for physicians, PSYPACT for psychologists, NLC for nurses) reduce the friction of multi-state licensure. They don’t eliminate it, and they don’t touch payer enrollment at all. Getting the licensure right and getting the billing right are two separate tracks. Both need to be complete before the visit happens.

The licensure layer: where the compact programs help

The Interstate Medical Licensure Compact (IMLC)

The IMLC is the streamlined pathway for physicians seeking licensure in multiple member states. As of 2024, the IMLC has 40+ member states. The compact allows physicians who meet specific eligibility criteria to apply for licenses in multiple member states through a single expedited process, with each state issuing its own full license.

Eligibility requirements for IMLC include:

• Designated State of Principal Licensure (SPL) — the state where the physician has a full, unrestricted license and meets residency/practice requirements
• No disciplinary actions, criminal convictions, or controlled substance violations
• Board certification in a recognized specialty, OR five years of practice history
• No prior IMLC applications pending, revoked, or withdrawn

If eligible, a physician can apply for licenses in all member states simultaneously through the IMLC Commission. Licenses are typically issued within a few weeks rather than the several months a standard state-by-state application process takes.

What the IMLC does not do: it does not grant multi-state privileges. Each IMLC license is a separate state license, subject to that state’s rules for renewal, CME, and disciplinary oversight. The IMLC just expedites issuance. Tracking renewals, CME requirements, and expiration dates remains a per-license responsibility — multiplied by every state on the roster.

PSYPACT

PSYPACT is the telehealth license compact for psychologists. As of 2024, PSYPACT has 40+ member jurisdictions. Eligible psychologists can obtain an “Authority to Practice Interjurisdictional Telepsychology” (APIT) that allows them to practice telepsychology with patients in member states without applying for individual state licenses in each jurisdiction.

PSYPACT eligibility requires:

• A doctoral degree in psychology
• Licensure in good standing in the psychologist’s home state
• APIT application through the Association of State and Provincial Psychology Boards (ASPPB)
• No disciplinary actions in any state

PSYPACT-authorized practice is limited to telepsychology only — in-person services in other states still require individual state licensure. PSYPACT authorization must be renewed annually.

Other compacts

• Nurse Licensure Compact (NLC): Allows RNs and LPNs to practice in compact member states on a multistate license issued by their home state. Currently 40+ member states.
• Physical Therapy Compact (PT Compact): Expedited licensure for physical therapists across member states.
• Counseling Compact: For licensed professional counselors; newer and fewer member states than NLC or IMLC.

Each compact operates independently. A provider who is a physician practicing via IMLC and a nurse who is NLC-eligible operate under completely different compact frameworks with different renewal timelines.

The enrollment layer: what the compacts don’t cover

Having a valid state license — whether through a compact or a direct application — is the prerequisite for payer enrollment in that state. It is not the enrollment itself.

For every state where a telehealth provider sees patients, each payer that the provider wants to bill needs a separate state-specific enrollment. That means:

Medicare: A provider enrolled in Medicare in their home state is enrolled nationally — Medicare does not require state-by-state enrollment. The national enrollment covers telehealth services delivered to Medicare patients regardless of which state the patient is in, provided the service type is covered under CMS telehealth rules.

Medicaid: Medicaid is a state program. Enrollment in one state’s Medicaid does not carry over to any other state. A provider seeing Medicaid patients in three states via telehealth needs three separate Medicaid enrollments. Each state’s enrollment process runs on its own timeline, uses its own application system, and has its own requirements.

Commercial payers: Commercial payer enrollment is typically state-specific. A provider enrolled with Blue Cross Blue Shield of Illinois is not enrolled with Blue Cross Blue Shield of Texas. These are separate legal entities with separate credentialing processes. Multi-state telehealth providers who have national commercial payer relationships (employers or brokers who sell plans across states) still need to verify that the specific payer product in each state honors the network enrollment from another state.

What the payer-side credentialing actually requires for telehealth

Commercial payers credentialing telehealth providers want to see:

1. A valid, current license in the state where the patient is located. Not the state where the provider’s physical office is. The relevant license is in the patient’s state.
2. Telehealth-specific credentialing application fields. Many payers have added telehealth service delivery checkboxes or specialty categories to their credentialing applications. The provider needs to indicate telehealth as a modality.
3. Malpractice coverage that includes telehealth. Not all malpractice policies cover telehealth by default. Some require a telehealth rider. The COI uploaded to CAQH needs to reflect the coverage the provider actually has.
4. Compliance with the payer’s telehealth policies. CMS telehealth coverage rules changed significantly during and after the COVID-19 public health emergency. Commercial payers have their own telehealth coverage policies that may be more or less restrictive than CMS. Enrolling for telehealth billing without verifying the payer’s current coverage rules results in clean denials.

The four failure modes we see most in multi-state telehealth practices

1. Practicing on a license the payer doesn’t have on file

A physician gets an IMLC license for State B. The physician starts seeing telehealth patients in State B. The State B payer enrollment isn’t started until the license is in hand. The enrollment takes 90 days. The claims from the first three months deny.

What prevents it: Begin payer enrollment applications in each new state simultaneously with the license application. Some payers won’t finalize enrollment without a license in hand, but applications can be submitted pending license — the effective date is adjusted when the license is confirmed.

2. Medicaid billing assumed under home-state enrollment

A provider enrolled in their home state’s Medicaid assumes that telehealth services delivered to patients who happen to be in that state during the visit are covered — and doesn’t check whether the patient’s Medicaid is a different state’s program. Medicaid follows the patient’s state of residence, not the location of the visit.

What prevents it: For every Medicaid patient, verify which state’s Medicaid program is applicable before billing. Telehealth doesn’t change the patient’s home state Medicaid enrollment.

3. PSYPACT renewal lapse

PSYPACT authorization expires annually. A psychologist who lets their PSYPACT authorization lapse loses the authority to practice interjurisdictional telepsychology in all member states simultaneously — not just one.

What prevents it: Track PSYPACT renewal on the same calendar as state license renewals. One lapse is one lapse of everything.

4. Malpractice policy doesn’t cover the practice states

A provider practicing in five states via telehealth has a malpractice policy that was written when they practiced in one state. The policy’s geographic coverage hasn’t been updated. A claim arises in State D — which the policy doesn’t cover. The provider’s malpractice carrier denies coverage.

What prevents it: Every time a license is added for a new state, the malpractice carrier needs a notification and a coverage confirmation for that state.

What to do this week

If you have telehealth providers practicing across state lines:

1. Map every state where telehealth patients are being seen. Not “where we might see patients” — where visits are actually occurring in the billing records right now.
2. Verify active licensure in each of those states. For each provider. Each license has its own expiration date.
3. Pull Medicaid enrollment status for each state on the map. Medicaid enrollment is state-specific; national enrollment doesn’t exist.
4. Check the malpractice COI. Does the policy’s geographic coverage match the state list?

If you’re standing up a multi-state telehealth operation and need the licensing and enrollment tracks mapped out before the first visit, talk to us. Getting the two tracks running in parallel — not sequentially — is what determines whether the first month of telehealth billing is clean.

— Medical Credentialing Services