Since the 18th century, states have been collaborating through the formation of interstate compacts to help solve a wide range of challenges that impact multiple jurisdictions. While the earliest interstate compacts focused on border agreements, their application eventually evolved to include issues such as emergency response preparedness, industry-specific challenges, and managing shared infrastructure or natural resources.

But interstate compacts can also be a useful tool to help workers in licensed professions practice in multiple states while ensuring that the standards in place to protect the public are upheld. In a previous article, we explored the history and evolution of the Nurse Licensure Compact (NLC) in detail, but interstate compacts exist for other health care professions as well, such as physicians, physical therapists, emergency medical technicians, audiologists and speech-language pathologists, and psychologists.

However, interstate compacts are not all made the same. In this article, we’ll take a look at different types of occupational licensure compacts and real-world examples of how they make licensing more efficient for applicants.

What are interstate compacts?

Interstate compacts are defined as formal agreements between two or more states that bind them to the compacts’ provisions. The right to form interstate compacts is authorized by the U.S. Constitution, and there are no constitutional restrictions on the subject matter of interstate compacts other than the implicit limitation that a compact’s subject matter must be among the powers that states are permitted to exercise.

Establishing an interstate compact can be a lengthy process that requires extensive collaboration between states. Before a compact comes into effect, it must be agreed to by each participating state’s legislature. Typically, a pre-determined number of states will have to join before the compact becomes active. Once it is triggered, the compact is overseen by an independent commission, made up of representatives from each participating state, which is responsible for creating the compact’s bylaws, regulations, and policies.

Types of occupational licensure compacts: Multistate license, “privilege to practice,” and expedited licensure

Occupational licensure compacts create reciprocal professional licensing practices between states that improve mobility for practitioners while ensuring the quality and safety of services, increasing efficiencies, lowering administrative costs, and improving information sharing between states. To date, more than 40 states and territories have adopted occupational licensure compacts, which typically take either a mutual recognition or expedited licensure approach.

Most of these compacts use a mutual recognition approach, whereby an individual either receives a multistate license from the compact state in which they reside or purchases a “privilege to practice” from the compact. The multistate license or privilege authorizes the licensee to practice in other compact states as long as they meet the compact eligibility requirements and maintain active status and residence in their home state. Generally, licensees are bound to the renewal and continuing education requirements of the state in which they reside.

The Nurse Licensure Compact (NLC) is an example of a compact that uses the multistate license model. Instead of obtaining multiple licenses, nurses who participate in the NLC apply for one multistate license which gives them the ability to practice in their home state as well as all other compact states. Nurses are eligible to participate if they pass a federal criminal background check and meet the minimum requirements, which are uniform across states. Compared with other compact types, the multistate license approach is the most convenient, flexible, and least costly. However, if a nurse switches their primary state of legal residence to another compact state, they must apply for licensure by endorsement immediately after they move to obtain a multistate license in their new home state.

The Physical Therapy Compact (PT Compact) provides an example of the “privilege to practice” model. To participate in the compact, practitioners must hold a current, valid license in their state and have a valid driver’s license to prove permanent residency. They also must not have any active encumbrances or disciplinary action against their license within the last two years. If they meet these requirements, they can purchase compact privileges from whichever compact state(s) they wish to practice in (provided they also meet the specific jurisprudence requirements/exams in those jurisdictions) and pay the applicable state fees. The process takes less than 10 minutes, and the licensee will immediately receive a unique compact privilege number for each state. Privileges expire at the same time as the home license, but they are easily renewed once the licensee has gone through the renewal process in their home state.

In contrast, the expedited licensure approach requires practitioners to actually hold a license issued by each compact state they wish to practice in. But instead of going through multiple regular application processes in each state, practitioners can request a license through the compact using a streamlined process that is faster and more efficient. One advantage of this approach is that it does not require licensees who move to a different compact state to apply for a new license if they have an expedited license for that state already. However, a drawback is that licensees must meet renewal and continuing education requirements and pay licensing costs in multiple states.

The Interstate Medical Licensure Compact (IMLC) is the only occupational licensure compact that uses the expedited licensure model. To participate in the compact, physicians must hold a full, unrestricted medical license in a compact member-state that can serve as a declared State of Principal License (SPL). Physicians must maintain their SPL status at all times, but they are able to change its location through a process called “redesignation.” To be eligible, physicians must also not have any history of disciplinary actions against their medical license, not have any criminal history, not have any history of controlled substance actions against their medical license, and not currently be under investigation. Applicants must pay a fee of $700 in addition to licensing fees in each state they wish to practice in. Each license is granted and issued by the individual state – not the IMLC itself.

Interstate compacts provide a modern solution to help professionals and the public

Starting with the NLC in the late 1990s, occupational licensure interstate compacts have provided a novel solution to address inefficiencies in licensing processes that can serve as a burden for workers, particularly in health care, who wish to practice across state lines. They also benefit the public by improving access to health care services, especially for people in remote or underserved areas, and by facilitating critical information sharing between states through centralized data collection. During the worst periods of the COVID-19 pandemic, as health care systems across the nation were pushed to the brink, the need for collaborative initiatives like interstate compacts that ensure a strong, fluid health workforce became even more apparent. But now, as telehealth gains momentum and labor shortages continue, it’s clear that the need for innovative solutions to facilitate mobility isn’t going away.