Use of telehealth services has surged since the COVID-19 pandemic; however, this increase in use does not come without limitations. Telehealth providers are subject to regulations, which differ by state, that govern various aspects of providing services via telemedicine, including what types of health care providers can provide telehealth services, what services can be provided via telehealth, and where providers must be located in order to provide telehealth services to a patient. A requirement consistent across most states is that providers engaging in telehealth services while providing care to a patient who lives in a certain state be validly licensed to practice in that state. For telehealth providers, and especially those seeking to offer a national platform of services, this creates an unavoidable challenge to obtain, and maintain, professional licenses across multiple states.

In December 2023, a lawsuit was filed in the U.S. District Court for the District of New Jersey that challenges the reinstatement of New Jersey’s telehealth rules that were suspended during the COVID-19 public health emergency; notably, the lawsuit challenges the regulation in New Jersey which requires providers to be licensed in New Jersey in order to provide services via telehealth to patients who are physically located in New Jersey. The plaintiffs in Shannon MacDonald, MD, et al v. Otto Sabando are families of patients who live in New Jersey but require follow up care from providers who are not licensed in New Jersey along with the doctors that are licensed in multiple other states, but not New Jersey.

The plaintiffs in MacDonald have argued that the regulation requiring providers to be licensed in the State of New Jersey in order to provide services via telehealth to patients physically located in New Jersey violates the Commerce Clause & Dormant Commerce Clause since the law is causing patients to suffer harm by not having access to specialty care and limiting care to those who need it. Additionally, the plaintiffs have argued that the Privileges and Immunities Clause is violated since the licensure law places an undue burden on out of state providers, without demonstrating any benefit on the state by forcing providers to get a license in a state where they may not see a lot of patients. The plaintiffs also make the argument that since patients are limited in their ability to discuss follow up care and treatment methodologies with their provider, the First Amendment is violated. Finally, the plaintiffs have argued that the Due Process Clause, which protects the right of parents to care for their child, is also violated since one of the plaintiffs is a minor patient, and the ability of the plaintiff’s father to seek medical care for his child is being restricted.

The MacDonald case underscores a broader issue regarding health care provider licensure in the United States, where restrictive licensure requirements can interfere with practitioners’ abilities to provide proper medical care. Given that each state has its own licensing board and set of requirements, a provider must obtain a separate license for each state where their patient is located in order to treat them in compliance with each states’ laws. This can be both a time consuming and costly undertaking for providers, as they are subject in each state to application and processing fees, completion of continuing education requirements, and state licensure examinations. Furthermore, these burdensome requirements can discourage health care providers from expanding their telehealth services, thereby limiting the growth of telehealth services nationwide. Efforts such as the Interstate Medical Licensure Compact, the Nurse Licensure Compact, and other professional compacts have simplified the licensure process for some health care providers, but not all states or types of licensed professionals participate in these compacts and, as such, a robust system promoting safe, efficacious, and compliant cross-state practices for health care providers has not yet been put in place.

The MacDonald case is a significant legal challenge to telehealth restrictions in New Jersey and has the potential to have widespread implications in other states with similar regulations. The outcome of this case could influence access to, and how telehealth services are regulated, in the future.

For additional information about the issues discussed in this post, or if you have any other questions or concerns regarding state licensure or other regulatory requirements for provision of telemedicine services, please contact one of the authors of this post or the EBG attorney who regularly handles your legal matters.

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