Latest / The Mental Health Evolution / Ep 24: Interstate Licensure Compacts

Transcript

Ep 24: Interstate Licensure Compacts · The Mental Health Evolution

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  (Transcribed by TurboScribe. Go Unlimited to remove this message.) This podcast is part of the Frederick Podcast Network.
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  Learn more at listenfrederick.com.
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  Welcome to Mental Health Evolution, a podcast about what's changing in mental
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  health and why it matters.
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  I'm your host, Rachel Harrison, inviting you into honest conversations with
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  people from all perspectives in the field, clinicians, tech founders,
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  investors, insurance companies, and all the folks in between.
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  Let's explore what's working, what's not, and what's next.
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  Welcome back to the Mental Health Evolution podcast.
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  I'm your host, Rachel Harrison.
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  And today I want to talk about one of the most promising
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  and honestly complicated shifts happening in mental health care right now,
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  which involves licensing and the interstate licensure compacts.
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  A lot of counselors, social workers, psychologists are very excited about this,
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  and I'm going to kind of go through each one and talk
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  about what's happening currently and how this might impact our industry as
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  a whole.
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  For professional counselors, an interstate compact is already live and
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  operational in a few states, allowing clinicians to practice across state lines
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  without holding multiple licenses.
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  And if you're like me, you already have licenses in several states
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  because that has been a necessity for sure up to this point.
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  If you want to see the most up-to-date status, you
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  can find it at CounselingCompact.gov, which tracks where the counseling compact
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  is active and where states are still in the implementation phase.
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  This matters because since the rise of telehealth, we've seen a clear
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  mismatch between where clinicians are licensed and where clients actually need
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  care.
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  Some areas have providers who can't find enough clients, while others, often
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  more rural communities, face serious shortages.
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  Interstate compacts could help bridge that gap, but they also raise important
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  questions about insurance coverage, reimbursement, and parity that we don't yet
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  have answers to.
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  So let's talk a little bit about what it is we are
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  referring to.
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  An interstate compact is essentially a legal agreement between multiple states
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  to recognize one another's professional licenses.
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  So a clinician in one state can provide care in another state
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  without having to secure a separate license.
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  The idea isn't new.
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  Nursing, for example, has had a compact for years, but more recently,
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  compacts have been developed for mental health professions.
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  So let's go through each one and talk about where the compact
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  is currently and where it's going.
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  So first, the counseling compact.
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  As I've already talked about a little bit, this allows licensed professionals
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  to practice across state lines in participating states.
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  So that's the key.
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  A lot of states have signed up to say that they're going
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  to do this, that they're interested in doing this.
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  But as of now, early 2026, Arizona, Minnesota, and Ohio are the
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  ones that have implemented the compact.
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  And many more states have passed the legislation or are finishing their
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  readiness requirements.
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  So hopefully that number of states will increase soon.
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  The social work licensure compact for clinical social workers is in
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  development.
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  Once a certain number of states enact the model laws, social workers
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  would be able to hold multi-state licenses and practice across state
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  boundaries.
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  Now lastly, psychologists, they already have the SIPAC.
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  So they've had this for several years.
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  The psychology inter-jurisdictional compact is what it is fully called, and
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  it enables psychologists to provide telehealth and in-state services across
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  participating state lines without multiple state licenses.
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  So they're a little ahead of the curve here.
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  Inter-state compacts like these are designed to reduce the administrative
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  burdens on clinicians, improve workforce mobility, and most importantly, expand
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  access to care for clients who may not have local providers.
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  All of that seems great for clients and great for therapists.
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  But I want to talk a little bit about some of the
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  challenges.
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  Right now, most clinicians still have to be licensed in the state
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  where the client is physically located at the time of the session.
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  So that means here in Maryland, if I am licensed in Maryland
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  to someone who lives in Montana, I can only do that if
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  I have a Montana license.
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  And even though the compacts will help with licensure, here's the rub.
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  Clinicians are often unsure how insurance companies will handle payment.
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  So for out-of-state care delivered via telehealth, some state laws
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  require private insurance to cover telehealth like in-person care, but not
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  at the same reimbursement rates.
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  And federally regulated plans can be even more complicated.
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  For example, private insurance laws are in place in over 40 states,
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  but these vary widely in whether insurance must reimburse telehealth at the
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  same level as in-person care.
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  In Medicaid reimbursement policies, these also differ by state and they control
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  how telehealth is paid within these Medicaid programs, but it still doesn't
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  fully answer whether out-of-state services will be covered.
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  And federal Medicare policies also have strict rules about where providers are
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  licensed and how telehealth services are reimbursed.
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  So this reimbursement landscape means that even when clinicians can legally see
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  clients across state lines under a compact, there can still be unanswered
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  questions about payment, client cost sharing, and network participation.
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  So that is a barrier that all therapists need to start looking
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  at as we are looking at these different compact pieces.
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  And if you are a clinician that takes insurance and wants to
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  take insurance, that could be a complicating factor.
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  But let's talk a little bit about what it could mean for
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  access to care and delivery if compacts become fully operationalized and
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  widespread.
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  A clinician in California can see a client in Montana as long
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  as both states participate.
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  Rural areas with provider shortages could get access to specialists located in
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  major metro areas.
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  So think about this.
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  If you are looking for a trauma specialist and there are none
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  in your state or in your area, you can access another state
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  where you might have even a lot of choices about what might
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  be a best match for you.
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  Clinicians potentially would spend less time and money maintaining dozens of
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  state licenses and more time with clients.
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  Like I said, most of us that I know have several licenses
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  already.
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  So reducing that and keeping track of the different CE requirements and
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  all of that would certainly be a time saver.
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  Compacts could become a real solution to the geographic provider imbalance.
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  And as a reminder, these compacts don't guarantee insurance coverage.
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  There's still a separate insurance policy question.
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  Each compact also has its own eligibility and administrative processes.
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  So some of that is yet to be seen and making sure
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  if you are a clinician that you are really ready to look
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  at that and understand what all of that means.
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  And lastly, telehealth practice will always be subject to scope of practice
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  laws such as client consent requirements and local privacy protections.
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  So you do need to be aware of the different laws and
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  the different governing ethics for the area that you're practicing in.
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  I think that as we look at the industry, it's very interesting
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  because a lot of the bigger national tech companies that offer therapy,
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  for example, they are already operating as if they can operate in
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  all 50 states.
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  And it's going to be interesting once these compacts come into play,
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  if a majority of states buy into them, it really does expand
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  the market.
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  It makes it so that instead of competing on a local level,
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  if you will, for clinics and clinicians, we are instead looking at
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  a national level.
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  So if we have a specific expertise, say, in our area of
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  the world, we may no longer be the top provider for, say,
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  OCD expertise, right?
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  Because there's a whole national pool for people to work with.
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  At the same time, therapists are still going to have limited caseloads
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  and can only see a certain number of clients.
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  So that is going to continue to be a thing that will
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  impact delivery of services.
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  It's going to be interesting to see how it plays out.
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  As telehealth continues to grow and become a permanent part of how
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  mental health care is delivered, these compacts represent one of the most
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  promising policy developments for clinicians and for clients alike.
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  But we have to consider insurance reimbursement, network participation, and
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  some real-world implementation.
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  I think it might be one of those things that there are
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  going to be unforeseeable conditions and consequences to this that we haven't
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  yet experienced.
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  For clinicians who want to expand their reach across state lines, whether
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  to serve underserved rural populations or to connect with specialty clients
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  nationwide, understanding your specific licensure compact, telehealth insurance
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  policy trends, and cross-state legal requirements is now essential.
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  So we are going to include some articles, as we always do
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  with this episode.
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  I didn't highlight them today because they were mostly just listing some
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  of the information that I already shared and talking about which states
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  are engaged with these different compacts.
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  So that is all for today on the Mental Health Evolution podcast.
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  We would love to hear from you, as always.
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  And hopefully this information about interstate licensure compacts has been
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  helpful and gets you thinking and prepared for what's coming.
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  Bye for now.
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  Thanks for listening to the Mental Health Evolution podcast.
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  Join the conversation.
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  Find us on socials, send us your thoughts, and tell us what
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  you're seeing in your corner of the mental health world.
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  Until next time, stay curious and keep evolving.
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  Live radio, local podcasts, the Frederick Podcast Network at listenfrederick
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  .com.