Credentialing for Telehealth: What You Need to Know to Practice Across State Lines
Telehealth has reshaped healthcare, offering patients access to care without the limits of geography. But while the technology is borderless, licensing and credentialing are not. Providers who want to practice virtually across state lines face an additional layer of compliance and payer requirements that can quickly become overwhelming if not managed proactively.
This article explores the rules, risks, and best practices of telehealth credentialing, including the role of the Interstate Medical Licensure Compact (IMLC), payer-specific expectations, and strategies to avoid costly mistakes.
The Foundational Rule: License Where the Patient Is
The most important principle of telehealth credentialing is simple:
A provider must be licensed in the state where the patient is physically located at the time of the virtual visit.
Example: A physician licensed in Illinois treating a patient in Arizona via video visit must hold an active Arizona license.
This rule applies universally to Medicare, Medicaid, and commercial payers.
Practicing without the correct license risks disciplinary action, malpractice coverage gaps, and claim denials.
For multi-state telehealth practices, this creates an immediate need for a multi-state licensure strategy — a costly and time-consuming effort if handled manually.
The Interstate Medical Licensure Compact (IMLC): A Faster Path
To reduce these administrative burdens, many states have joined the Interstate Medical Licensure Compact (IMLC), which provides an expedited pathway for physicians to obtain licenses in multiple states.
How It Works
A physician with a full, unrestricted license in their State of Principal License (a compact member) applies through the IMLC process.
The compact issues expedited licenses in other participating states without repeating the full application process each time.
Benefits
Cuts months off the traditional application process.
Makes it feasible to practice across multiple states quickly.
Ideal for telehealth-focused practices expanding their footprint.
Eligibility
To qualify, physicians must:
Have no disciplinary or criminal history
Hold a primary license in an IMLC member state
Meet board certification and other professional criteria
Current Coverage
As of mid-2025, the IMLC includes over 40 states, Washington D.C., and Guam, representing access to the vast majority of U.S. patients.
Example: A family physician in Colorado (IMLC member state) can obtain expedited licenses in Arizona, Utah, and Minnesota — enabling seamless cross-state telehealth services.
Payer-Specific Telehealth Credentialing
Even with state licensure secured, providers must meet payer-specific requirements.
Medicare: Requires enrollment and credentialing in PECOS. State licensure still applies — Medicare does not waive local requirements.
Medicaid: Rules vary by state. Some states expanded telehealth coverage permanently post-COVID, while others maintain strict limits. Each state Medicaid program may require separate enrollment.
Commercial Payers: Typically credential telehealth providers through CAQH and payer-specific portals. Many now require additional telehealth attestations covering technology use, HIPAA compliance, and patient privacy.
Failing to align payer enrollment with state licensure creates revenue risks — even if the provider is technically licensed in the patient’s state.
Unique Challenges of Telehealth Credentialing
Even with the IMLC in place, telehealth introduces unique complexities:
Multi-State Licensing Costs & Renewals
Each state charges fees and has CME or renewal requirements.
Missed deadlines can lead to uncredentialed claims and revenue loss.
Documentation & Auditing
Providers must maintain meticulous records of licenses, payer credentialing, and expirations for every state.
Auditors frequently request proof of compliance, making poor tracking a liability.
Technology & Security
Payers and facilities often require proof of HIPAA-compliant telehealth platforms.
Security breaches can trigger both compliance and reimbursement consequences.
Professional Malpractice Coverage
Not all malpractice policies automatically cover multi-state or telehealth-specific services.
Practices may need special riders or expanded coverage to remain protected.
Hospital & Facility Privileging
Providers delivering telehealth through hospitals may still require privileging.
Some facilities adopt credentialing by proxy to streamline processes, but others mandate full applications.
Best Practices for Telehealth Credentialing Success
To reduce risks and keep revenue flowing:
Plan Ahead: Begin the licensure process 4–6 months before expanding into new states.
Leverage the IMLC: If eligible, use the compact to cut time and costs dramatically.
Centralize Tracking: Implement a credentialing system or RCM platform with automated reminders for licenses, expirations, and payer re-credentialing.
Audit Regularly: Maintain updated documentation of all licenses and payer approvals.
Verify Malpractice Coverage: Ensure policies cover out-of-state and virtual care.
Outsource When Needed: Credentialing experts can manage CAQH, PECOS, Medicaid, and commercial payer compliance on your behalf.
The Bottom Line
Telehealth has expanded opportunities for providers and patients alike — but without the right credentialing framework, practices risk claim denials, compliance violations, and malpractice exposure.
By aligning with the state-based licensure rule, leveraging the IMLC, and proactively managing payer and technology requirements, providers can scale their telehealth services while safeguarding revenue.
How MBW RCM Can Help
At MBW Revenue Cycle Management, we simplify telehealth credentialing and compliance:
Support for multi-state licensure applications and IMLC processing
Full credentialing and enrollment with Medicare, Medicaid, and commercial payers
Ongoing monitoring of state licenses, payer re-credentialing, and CAQH attestations
Compliance oversight for HIPAA, telehealth technology standards, and malpractice coverage
Expanding your telehealth services across state lines? Partner with MBW RCM to eliminate credentialing headaches and protect your revenue cycle.
