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Are Interstate Compacts an Answer to Health Workforce Shortages?

Several states consider interstate licensure to add depth to local labor pools.

By Eric Peterson  |  November 28, 2023

With the post-pandemic health care workforce stretched to its limits, state legislatures are in search of solutions. Interstate licensure compacts have emerged as one of many legislative strategies to add some depth to local labor pools.

“It’s a legal contract between states,” Matt Shafer, deputy director of the National Center for Interstate Compacts, told a session at NCSL Base Camp. “This is a legally binding agreement that two or more states have entered into with one another. The other thing to emphasize here is that it’s legislatively enacted.”

Such compacts have been created in nearly every state to allow specific health care professionals to work in several states with a single license. There are at least 15 licensure compacts in all, covering everything from emergency medical services to massage. The largest are for nurses (41 states, Guam and the Virgin Islands) and physicians (39 states, Washington, D.C., and Guam).

Also at the Base Camp session were Sarah Jaromin, a policy associate in NCSL’s Health Program; Lynn E. Linde, chief of professional practice at the American Counseling Association; and Nicole Livanos, director of state affairs at the National Council of State Boards of Nursing.

A Primer on Interstate Compacts

Professional licensure requirements, including interstate compacts, are set by state legislatures. “You might not know this, but your ability to drive across state lines is governed by the driver’s license compact,” Shafer says. “This is not a federal solution. This was states coming together in developing a compact to solve this issue of motor vehicles across state lines.

“A lot of these occupational licensing compacts really operate in a similar manner whereby you’re maintaining one state-issued license, and that authorizes you to be able to practice in other member states that are a part of the compact.”

Founded in 2005 as part of the Council of State Governments, the National Center for Interstate Compacts, or NCIC, is “the only technical assistance provider out there around the creation and enactment of these interstate compacts,” Shafer says. “We work with a variety of different stakeholders throughout the development process of these compacts.”

State Considerations

Interstate compacts are one of many strategies states may leverage to increase licensure portability across state borders; others include reciprocity, endorsement and universal licensure. Compacts may provide benefits to a variety of stakeholders in the professional licensure process, but they also require considerations from states before enactment.

Some states have expressed concerns about joining interstate compacts, citing diminishing nursing board revenues, decreased work standards, lack of disciplinary oversight and loss of sovereignty.

Shafer addressed some of these concerns by emphasizing that compacts are not a takeover of a state’s current system. "What a compact does is create an alternative, optional pathway to practice for somebody who wants to be mobile or work in multiple states,” he says.

Practitioners primarily benefit from “increased mobility,” Shafer says. “You’re no longer bound to only practicing in the state where you hold a license, but a lot of these compacts open up your ability to practice across state lines … in an easy, streamlined manner.” It also opens up a door for telemedical practice, he adds, “a huge benefit to practitioners.”

“We’ve heard so many horror stories of military spouses who hold six and eight licenses and have to do the continuing education for all of them.”

—Lynn E. Linde, American Counseling Association

Licensing boards benefit in the form of standards as well as shared data, and states can use compacts for workforce development. “COVID is a great case study for how it’s important for states to be able to share practitioners across state lines, especially in times of emergencies,” Shafer says.

The new Counseling Compact, now open to practitioners from 28 (and counting) member states, offers a benefit to patients. “This is particularly important for continuity of care,” says Linde of the American Counseling Association. “We know that this is a very mobile society. The pandemic certainly demonstrated the deficit in our mental health delivery system and the lack of appropriate and qualified practitioners to address the needs of our population. Telehealth allows counselors to continue to work with clients when they move to another compact state, or if they live someplace else for a certain number of weeks or months of the year.”

Interstate compacts are also a big help to military families relocating to new states, she notes. “We’ve heard so many horror stories of military spouses who hold six and eight licenses and have to do the continuing education for all of them, and keep track of their dates, and pay all of that money. And this really makes it so much easier.”

Linde notes that the compact gained increasing traction once it hit a critical mass of about 15 member states in 2022. “Compacts are based on trust. And I think that was a big leap for a lot of legislators and a lot of licensing boards.”

Long-Term Results

Formed in 1999, the Nurse Licensure Compact is one of the country’s largest and oldest interstate licensure compacts. “Over 2.2 million nurses currently hold multi-state licenses under the Nurse Licensure Compact,” says Livanos with the National Council of State Boards of Nursing.

The breadth and history of the program means there has long been an opportunity to gather feedback on results.

“We know that there is a lot of focus on the nursing workforce shortage right now, so we have asked compact member states as well as some stakeholders within those jurisdictions to submit a letter detailing how the NLC has impacted the workforce there,” Livanos says. In some cases, the compact was able to get practitioners working more quickly once they were hired, especially if they were recruited from other compact jurisdiction.

As NCIC develops interstate compacts for school psychologists, dietitians and respiratory therapists, a new concept is emerging. “A lot of states are exploring universal recognition laws, which essentially say if you’re licensed in another state, we’ll grant you our equivalent license,” NCIC’s Shafer says.

Under universal license recognition, applicants must hold a license in good standing in their home state. They must be facing disciplinary action and may still be required to pay fees or take exams in the state where they hope to work. Universal recognition does not affect interstate compacts.

NCSL takes no position on state legislation or laws mentioned in linked material, nor does NCSL endorse any third-party publications; resources are cited for informational purposes only.

Eric Peterson is a Denver-based freelancer.

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