oversight

Veterans' Affairs: Potential Costs of Changes in Licensing Requirement Outweigh Benefit

Published by the Government Accountability Office on 1999-05-21.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                  United States General Accounting Office

GAO               Report to the Chairman, Subcommittee
                  on Health, Committee on Veterans’
                  Affairs, House of Representatives


May 1999
                  VETERANS’ AFFAIRS
                  Potential Costs of
                  Changes in Licensing
                  Requirement Outweigh
                  Benefit




GAO/HEHS-99-106
                   United States
GAO                General Accounting Office
                   Washington, D.C. 20548

                   Health, Education, and
                   Human Services Division

                   B-279951

                   May 21, 1999

                   The Honorable Cliff Stearns
                   Chairman, Subcommittee on Health
                   Committee on Veterans’ Affairs
                   House of Representatives

                   Dear Mr. Chairman:

                   Currently, the Department of Veterans Affairs’ (VA) physicians and
                   registered nurses may provide medical care in VA facilities if they have a
                   license to practice in any state. In recent years, concerns have been
                   expressed about physicians providing care in states where they are not
                   licensed. Reflecting these concerns, in July 1997, a bill1 was introduced in
                   the 105th Congress that would have required the Secretary of Veterans
                   Affairs to assign a health care professional2 only to facilities in a state
                   where the professional is licensed to practice—in effect requiring health
                   care professionals to be licensed in the state where they provide medical
                   care. Though the bill has not been reintroduced in the 106th Congress, you
                   were concerned about the effect that this approach to licensing, if
                   implemented, would have on VA’s health care system. Regarding these
                   concerns, you asked us to (1) compare VA’s current physician employment
                   requirements and processes with those of other federal agencies;
                   (2) compare VA’s requirements with those of private sector health care
                   organizations; (3) assess the potential benefits and costs of requiring VA
                   physicians and registered nurses to be licensed in the state where they
                   practice; and (4) determine implications of such a licensing change on VA’s
                   use of telemedicine. We conducted our review from April 1998 through
                   April 1999 in accordance with generally accepted government auditing
                   standards. Details on our scope and methodology are in the appendix.


                   Generally, VA and other major federal agencies, such as the armed services
Results in Brief   and Public Health Service (PHS), that employ physicians to provide medical

                   1
                    H.R. 2338 proposed amending the law to require the Secretary to assign VA’ s health care
                   professionals only to VA facilities in states where they are licensed to practice. However, the bill did
                   not address whether this requirement applied to current VA employees or only to employees hired
                   after its enactment. H.R. 2338 was also silent about whether VA’s physicians and registered nurses who
                   provide care via telemedicine would be subject to the telemedicine licensing requirements of each
                   state in which they practice telemedicine. Requirements in the bill would have become effective 6
                   months after enactment.
                   2
                    Health care professionals include physicians, dentists, podiatrists, optometrists, nurses, physician
                   assistants, and expanded-function dental auxiliaries. However, as agreed with your office, we limited
                   our review of the impact of this legislation to physicians and registered nurses.



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             care use similar employment practices. These agencies require physicians
             to be U.S. citizens; possess a current license to practice medicine from any
             state; have graduated from an approved medical school program with a
             Doctor of Medicine (M.D.) or Doctor of Osteopathy (D.O.) degree; have
             completed at least a 1-year internship, residency, or fellowship; and have
             undergone a suitability investigation for federal employment. Beyond
             these basic requirements, VA requires its physicians to demonstrate
             English proficiency and pass a physical exam; in 1997, it also began
             requiring newly hired physicians to be board certified in a medical
             specialty. In contrast, in accordance with state laws, private sector
             physicians must be licensed in the state where they practice. Also, unlike
             VA, less than half of the health maintenance organizations (HMO) and
             preferred provider organizations (PPO) we contacted require U.S.
             citizenship, board certification, or demonstrated English proficiency, and
             none require a physical exam.

             The potential costs to VA of requiring physicians and registered nurses to
             be licensed where they practice would likely exceed any benefit. If the
             licensing requirements were changed, up to 14 percent of VA’s physicians
             and 13 percent of VA’s registered nurses would have to obtain new state
             licenses or transfer to VA facilities located in states where they are
             licensed. VA believes the costs and burden generated by such a change
             would outweigh any benefits to its operation. Supporting this view,
             literature shows no linkage between differences in state licensing
             practices and quality of care. Likewise, individuals representing physician
             and nursing boards told us that the quality of patient care and differences
             in state licensing practices are not directly linked.

             The impact of a licensing change on telemedicine would likely be modest.
             VA expects that its telemedicine activities that cross state lines would be
             significantly hampered by requiring physicians and registered nurses to be
             licensed in every state where they provide care through telemedicine.
             However, we found that many state laws exempt VA providers from their
             licensing requirements when they practice telemedicine.


             The federal government employs about 31,000 physicians who provide
Background   medical care to veterans, uniformed services personnel and their
             dependents, federal prisoners, Native Americans, and Alaska Natives. Of
             these physicians, about 17,000 are employed by VA and provide medical
             services to veterans at 181 treatment facilities nationwide (see table 1).




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                                     These medical centers are grouped into 22 Veterans Integrated Service
                                     Networks that each serve a particular geographic area.

Table 1: Number of Physicians
Providing Medical Care Employed in                                         Number of civil                Number of
Federal Agencies                                                                 service              commissioned
                                     Federal agency                           physicians          officer physicians             Total
                                     VA                                              16,974                          0          16,974
                                     Army                                               454                      4,580           5,034
                                     Navy                                                 91                     4,039           4,130
                                     Air Force                                            56                     4,131           4,187
                                                                                                                       a
                                     Bureau of Prisons                                  195                         14                209
                                     U.S. Coast Guard                                      1                        57a               58
                                                                                                                       a
                                     Indian Health Service                              648                        344                992
                                     Total                                           18,419                    13,165           31,584
                                     Note: Army, Navy, and Air Force numbers are for fiscal year 1997; VA and Indian Health Service
                                     numbers are from 1998; and Bureau of Prisons and Coast Guard numbers are from 1999.
                                     a
                                     These physicians are PHS Commissioned Corps officers.



                                     When hiring physicians, most federal agencies use the Office of Personnel
                                     Management’s (OPM) physician qualification standards. OPM is the central
                                     federal agency charged with establishing and administering federal
                                     personnel laws, regulations, and rules. OPM sets federal policy for hiring,
                                     managing, compensating, and separating federal employees, and most
                                     federal agencies use OPM standards to determine whether applicants meet
                                     the minimum requirements for a position. Moreover, VA has specific
                                     statutory employment eligibility requirements for physicians, and the
                                     Department of Defense (DOD) has specific statutory employment eligibility
                                     requirements for physicians who are commissioned officers. These
                                     agencies may also add employment requirements beyond the statutory
                                     requirements.

                                     Under current law, VA’s physicians and registered nurses are eligible for
                                     assignment to positions in VA if they have the necessary degrees and
                                     experience and are licensed to practice in any state. Thus, VA may assign
                                     them without regard to where they are licensed. In the private sector,
                                     however, physicians and registered nurses must be licensed in the state
                                     where they practice. Licensing requirements for physicians and registered
                                     nurses have evolved over the years, with states sharing common
                                     categories of requirements. For example, all states require physicians to
                                     pass a national licensing exam with the same minimum score. In addition,



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                                     all states have basic requirements relating to education, references,
                                     personal identification, and so on, but within these categories, the specific
                                     requirements may vary somewhat from state to state. For instance, a few
                                     states require 3 years of postgraduate training, while most states require
                                     only 1 year.

                                     Some states have also begun requiring physicians practicing telemedicine
                                     within their borders to be licensed in that state. Telemedicine involves
                                     using imaging and diagnostic equipment to gather data from a patient and
                                     sending the data electronically from one location to another to have a
                                     specialist interpret the data. Telemedicine services include nuclear
                                     medicine, radiology, pathology, mental health, and pacemaker-monitoring
                                     programs.


                                     VA; the Army, Navy, and Air Force; PHS Commissioned Corps; Coast Guard;
Most Federal                         Bureau of Prisons (BOP); and Indian Health Service (IHS) are the major
Agencies Have Similar                federal agencies that employ physicians to provide medical care. For the
Physician                            most part, VA and other major federal agencies follow similar physician
                                     employment practices when hiring both civilian and commissioned officer
Employment                           physicians. Federal agencies have in common a basic set of requirements,
Requirements and                     as shown in figure 1.
Processes
Figure 1: Common Federal Physician
Employment Requirements




                                     a
                                     This requirement can be waived for civil service physicians if there are no qualified U.S. citizens.




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                            B-279951




                            In addition to these basic employment qualifications, physicians who
                            provide medical care in the federal sector must undergo a credentialing
                            and privileging process before they begin treating patients. Credentialing
                            involves verifying the validity or authenticity of the physician’s degree,
                            license, graduate training, experience, ability, judgment, and health status.
                            It also includes a query of the National Practitioners Data Bank (NPDB)3 to
                            determine whether any adverse actions have been taken against a
                            physician’s license and to obtain information on malpractice claims paid
                            on behalf of the physician. To grant a physician privileges, a review
                            committee at the facility where the physician will treat patients uses the
                            verified credentials to determine what specific medical procedures the
                            physician will be permitted to independently perform in the treatment
                            facility.

                            Beyond these common requirements, federal agencies have additional
                            requirements as discussed, by agency, in the following sections.


VA                          In addition to the requirements common to other agencies, VA physicians
                            must possess basic proficiency in written and spoken English,4 be board
                            certified in their specialty,5 pass a physical exam, and undergo
                            credentialing and privileging upon employment and at least every 2 years
                            thereafter. VA also conducts primary source verification of physicians
                            credentials by contacting individuals or institutions having direct
                            knowledge of the physician’s degree, license, graduate training,
                            experience, ability, judgment, and health status.


Army, Navy, and Air Force   The Army, Navy, and Air Force each recruit their own physicians and use
                            the same common physician employment requirements as VA and the other
                            federal agencies when employing commissioned officer and civilian
                            physicians. However, in addition to the common requirements, each
                            service has different age restrictions for commissioned officer physicians
                            and requires them to undergo a physical exam and medical readiness
                            training that prepares them for operational military requirements. Like VA

                            3
                             The Health Care Quality Improvement Act of 1986 (P.L. 99-660), as amended, established a data bank
                            to help ensure that unethical or incompetent practitioners do not compromise health care quality. The
                            data bank contains information on adverse actions taken against a physician’s license, clinical
                            privileges, professional society membership, and malpractice payments.
                            4
                             This requirement was added in Nov. 1977 by P.L. 95-201.
                            5
                             This requirement was added by VA in June 1997 and applied to physicians hired on or after July 1,
                            1997. A medical specialty is a branch of medicine in which the physician has undergone additional
                            education and training, such as general surgery, internal medicine, or neurosurgery.



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                         physicians, all commissioned and civilian physicians in the military
                         services must undergo a credentialing and privileging process before they
                         treat patients at military facilities. Also like VA, when credentialing
                         physicians, the services conduct primary source verification of a
                         physician’s credentials and query the NPDB. The Navy also requires
                         commissioned officer physicians who have graduated from a foreign
                         medical school to be board certified within 1 year of reporting for active
                         duty.

                         In contrast to VA, which grants privileges every 2 years, the Army, Navy,
                         and Air Force grant newly employed physicians provisional privileges for 1
                         year at the military treatment facility where the physician will practice.
                         During this period, the physician’s clinical performance is under review by
                         a supervisor to ensure clinical competence. Upon successful completion
                         of the initial year, physicians may be granted full staff privileges, which are
                         reviewed every 2 years thereafter.


PHS Commissioned Corps   The PHS Commissioned Corps is a component of the Department of Health
                         and Human Services. The mission of the PHS Commissioned Corps is to
                         provide highly trained and mobile health professionals who carry out
                         programs to promote the health of the nation and deliver services to
                         federal beneficiaries at agencies such as the U.S. Coast Guard, BOP, and
                         IHS. In addition to the common physician employment requirements, a
                         commissioned officer in the PHS must be under the age of 44 when
                         applying to the PHS, pass a physical exam, and be found medically qualified
                         to perform the work.

                         After meeting these qualifications, a physician may be offered a
                         commission in the PHS and then be assigned to a position at selected
                         federal agencies. Before being assigned to an agency, PHS commissioned
                         officer physicians must meet the employment requirements of the
                         employing agency, which is also responsible for credentialing and
                         privileging the physician.


Coast Guard              The Coast Guard employs PHS commissioned officer physicians and does
                         not have additional employment requirements beyond those established
                         by the PHS. Like VA, the Coast Guard conducts primary source verification
                         of a physician’s credentials and queries the NPDB before the physician
                         begins providing medical care. Unlike VA, Coast Guard physicians are
                         initially granted provisional privileges for 1 year at the health care facility



                         Page 6                                          GAO/HEHS-99-106 Medical Licensing
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      where they will practice. After successful completion of the first year,
      physicians are eligible for full staff privileges, which are reviewed every 2
      years thereafter.


BOP   In addition to the common federal physician employment practices, BOP
      requires physicians to pass a physical exam and successfully complete a
      standard institutional curriculum and a 3-week training program that
      includes a physical abilities test. Credentialing, however, is conducted by a
      credential verification organization with which BOP contracts, and
      privileging is conducted at the individual BOP medical facility where the
      physician will practice. Like VA, BOP grants privileges every 2 years.


IHS   IHS uses the common federal physician employment requirements. In
      addition, IHS commissioned corps and civilian physicians undergo a
      character investigation required by the Indian Child Protection and Family
      Violence Prevention Act.6 The facility where the physician will practice
      conducts primary source verification of the physician s credentials and
      queries the NPDB before the physician may provide medical care. Similar to
      VA, privileging is conducted at the IHS facility when the physician is first
      employed and at least every 2 years thereafter.

      The varying requirements of these agencies are summarized in figure 2.




      6
       The minimum standards of character set by this act are that “none of the individuals appointed have
      been found guilty of, or entered a plea of nolo contendere or guilty to, any offense under federal, state,
      or tribal law involving crimes or violence; sexual assault, molestation, exploitation, contact or
      prostitution; or crimes against persons.”



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Figure 2: Federal Agencies’ Additional Physician Employment Requirements




                                        Note: NA = Not applicable, because it is the responsibility of the hiring agency to credential and
                                        privilege the physician.
                                        a
                                         PHS Commissioned Corps.
                                        b
                                            Coast Guard.
                                        c
                                         PHS Commissioned Corps requirements.
                                        d
                                            For physicians hired on or after July 1, 1997.
                                        e
                                         The Navy requires commissioned officers who have graduated from foreign medical schools to
                                        be board certified within 1 year of commissioning.




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                         Overall, private sector HMOs and PPOs we surveyed7 have physician
VA and Large HMOs        employment requirements comparable to VA’s. The principal difference is
and PPOs Have            that physicians working in the private sector are subject to state
Similar Physician        jurisdiction and therefore must be licensed in each state where they
                         practice medicine. Like VA, HMOs and PPOs require physicians to have an
Employment               M.D. or D.O. degree and most require a 1-year internship, residency, or
Requirements             fellowship and have a credentialing and privileging process that occurs at
                         the time of employment and every 2 years thereafter. In addition, like VA,
                         about half of the HMOs and PPOs we surveyed verify date of birth,
                         citizenship, and employment history and conduct a criminal background
                         investigation. However, less than half of the HMOs and PPOs we contacted
                         require U.S. citizenship, board certification, or demonstrated English
                         proficiency, and none require a physical exam.

                         The HMOs and PPOs we surveyed also conduct credentialing and privileging.
                         About half of them conduct primary source verification of physicians’
                         credentials, as VA does. The remainder obtain information from various
                         sources, such as the American Medical Association (AMA) database and the
                         Federation of State Medical Boards database. The AMA database, known as
                         the AMA Masterfile, contains information on physicians’ medical education,
                         training, and licenses and disciplinary actions taken against physicians by
                         state boards. The Federation of State Medical Boards database contains
                         information on state medical board actions taken against a physician’s
                         license such as suspension, revocation, and probation. A few of these
                         organizations contract with organizations that specialize in verification of
                         physician credentials. We also found that the majority of the HMOs and PPOs
                         we surveyed query the NPDB for actions taken against a physician’s license
                         and to obtain information on malpractice claims paid.


                         Changing the licensing requirement for VA’s physicians and registered
Changing the             nurses to require that they be licensed in the state where they practice
Licensing                would reduce VA’s flexibility to hire, assign, and transfer its health care
Requirement              professionals. In addition, it could cause a temporary disruption in VA’s
                         operations as physicians and registered nurses tried to obtain licenses or
Adversely Affects VA’s   to transfer to VA facilities in states where they are licensed. VA was unable
Staffing Flexibility     to provide data that would allow us to more fully quantify this effect.
                         However, because we also found no apparent benefit from such licensure
Without Apparent         changes, these potential costs, even if VA could minimize them, suggest
Benefit                  that imposing an in-state licensing requirement would not be worthwhile.

                         7
                          To compare VA’s physician employment requirements with the private sector’s, we contacted HMOs
                         and PPOs that operate in several states and have at least a total of 1 million covered lives.



                         Page 9                                                    GAO/HEHS-99-106 Medical Licensing
                           B-279951




Potential Effect on        VA records show that if the licensing requirement was changed and applied
Professional Health Care   to current employees, about 14 percent of VA’s physicians and 13 percent
Staffing                   of VA’s registered nurses would be affected. The provision of health care
                           could temporarily be disrupted as these physicians and nurses sought to
                           obtain new licenses. However, neither we nor VA were able to project from
                           this the potential effect such a change could have on patient care.

                           VA records show that in November 1998 about 2,300 of its physicians were
                           licensed in states other than where they worked. Under the proposed
                           change, all of these physicians could be required to obtain new state
                           licenses to practice or would have to relocate to a VA facility in a state
                           where they have a license. Since these physicians are already licensed,
                           they would have to apply for a license by endorsement in the state where
                           they plan to practice. Under licensure by endorsement, the state where a
                           physician seeks a new license reviews the physician’s credentials and
                           experience and determines whether to issue a license. Like the initial
                           license, licensure by endorsement requirements for physicians differ from
                           state to state—some require another licensing exam if it has been more
                           than 10 years since the physician’s initial exam, some require a personal
                           interview and a list of professional society memberships, and a few require
                           an oral exam and information on delinquent educational loans. The cost
                           for licensure by endorsement varies from $80 to $1,375. In addition, states
                           require periodic reregistration to maintain the license, with fees ranging
                           from $50 to $600.

                           VA also employs about 4,600 registered nurses who practice in states other
                           than where they are licensed. Since these registered nurses already have a
                           state license, they would also have to apply for a license by endorsement.
                           Similar to physician licensing requirements, licensure by endorsement
                           requirements for registered nurses differ from state to state. For example,
                           some states have age restrictions, most require English language
                           proficiency, and almost all review for felony convictions. Costs for
                           licensure by endorsement vary from $25 to $135. After obtaining a license,
                           registered nurses are required to reregister periodically, with
                           reregistration fees ranging from $15 to $135.

                           According to VA and representatives of state licensing boards, it may be
                           difficult and could take up to a year for some physicians and registered
                           nurses to obtain a new state license. In addition, because of different state
                           licensing requirements, some of these health care professionals may not
                           be able to get a license where they currently practice. For example, if a
                           state requires 2 years of supervised postgraduate training and the



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                           physician only has 1 year of such training, he or she could not get a license
                           in that state without obtaining a year of supervised postgraduate work.
                           However, VA was unable to provide data substantiating the potential
                           impact more specifically.

                           Several VA officials told us that a change in the licensing requirement
                           would also restrict the pool of applicants for vacancies at some VA medical
                           centers and that, as a result, VA’s ability to recruit and retain health care
                           professionals would be made even more difficult than it has historically
                           been. In November 1998, VA records showed that it employed about 17,000
                           physicians and 35,000 registered nurses, and VA officials projected that
                           they may hire another 4,200 physicians and 7,600 registered nurses over
                           the next 3 years.8 VA officials believe that their pool of applicants for these
                           positions would be limited if the applicants were required to be licensed in
                           the state where VA wanted the health professionals to practice—fewer
                           people will apply because they are not licensed in the state where the job
                           is.

                           VA officials also told us that changing the licensing requirement might
                           hinder granting transfers to its health care professionals. Over the past 3
                           years, VA noted that it has averaged 7 chiefs of staff and about 8 chiefs of
                           nursing transfers to different states each year. VA officials noted that, in
                           recent years, virtually all transfers have been made at the request of the
                           employee when filling vacant positions. Apart from these examples,
                           however, VA was unable to give us detailed information on the total
                           number of physician and registered nurse transfers, the locations of the
                           transfers, and where the individuals were licensed. Without such data, we
                           could not assess the likely impact on VA’s physicians and registered nurses
                           or the probable effect on VA’s ability to deliver health care.


No Apparent Benefit From   To provide a balanced assessment of whether the change in the licensing
Changing the Licensing     requirement would have an effect on the quality of patient care, we
Requirement                reviewed the literature for evidence of a relationship between physician
                           licensure and quality of care and found no studies indicating that
                           differences in state licensing practices are related to the quality of medical
                           care. Though state licensing requirements vary, all states require
                           physicians to pass a national licensing exam with the same minimum



                           8
                            Several VA medical centers did not provide information on projected hiring needs. They said that they
                           were unable to predict their hiring needs because of restructuring, facility integrations, and
                           downsizing.



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                       score.9 In addition, all states share common categories of requirements,
                       such as education, references, personal identification, cost, and
                       reregistration, that are generally similar. We also spoke with VA and AMA
                       officials and others representing over 100 state medical licensing boards
                       for physicians and nurses. These individuals told us that while licensing
                       ensures that the provider has the basic education, skills, and competency
                       to meet the state’s standards, they believe quality of care is not directly
                       linked to the licensing requirements in the state where the physician is
                       licensed.


                       Contrary to VA’s view, we find little evidence to indicate that licensing
Changing the           changes would have a substantial effect on VA’s telemedicine activities.
Licensing              Although VA expects its use of telemedicine to grow, it did not provide
Requirement May        information on the extent to which its current telemedicine activities
                       would be affected or the extent of the expected increase in telemedicine
Have a Modest Effect   use. In addition, state laws exempting VA would likely lessen the effect of a
on Telemedicine        licensing change.

                       VA reports that it has 23 telemedicine services that cross state lines.
                       According to VA, during fiscal year 1997, these services resulted in 61,911
                       consultations.10 VA officials believe VA’s initial clinical telemedicine
                       demonstrations and projects show that substantial benefits can be realized
                       from telemedicine applications, including improved access to care;
                       improved continuity and timeliness of care; enhanced availability of
                       subspecialty expertise; and increased support to health care providers and
                       veterans, particularly in remote, rural, and isolated areas.

                       Because VA telemedicine services are provided by physicians and nurses
                       located in one state to patients in another, VA program managers believe
                       that changing the licensing requirement would substantially compromise
                       the availability of telemedicine and its future development within VA. For
                       example, VA officials pointed out that four nuclear medicine specialists
                       located and licensed in St. Louis, Missouri, provide telenuclear medicine
                       services in seven other states. VA contends that if these physicians are
                       required to be licensed where they practice, each of the four physicians
                       would have to obtain additional licenses to provide their services in the

                       9
                        The U.S. Medical Licensing Exam was phased in from 1992 to 1994, replacing two other exams states
                       had used for medical licensure.
                       10
                        This number includes about 4,800 nuclear medicine consults for fiscal year 1997. The remaining
                       57,100 consults took place between January and June 1997 and include 45,000 pacemaker consults.
                       Consults include diagnostic interpretations of information sent electronically, direct video interviews
                       between a patient and a health care provider, and physician-to-physician consultation about a patient.



                       Page 12                                                        GAO/HEHS-99-106 Medical Licensing
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                  states where they currently provide telenuclear medicine services because
                  none are licensed in any of those states.

                  Similarly, at VA’s Iron Mountain, Michigan, medical center, officials believe
                  that the licensing change would have a negative effect on Iron Mountain’s
                  telemedicine initiatives because it would require licensure of between 25
                  and 30 practitioners who now provide telemedicine services from the VA
                  medical center in Milwaukee, Wisconsin,11 to veterans at the medical
                  center at Iron Mountain. These practitioners would have to obtain a
                  Michigan license.

                  Despite offering these two anecdotal examples, VA was unable to provide
                  systemwide information on the total number of physicians and registered
                  nurses who routinely provide patient care through telemedicine activities,
                  where these individuals are licensed, and the locations to which they
                  provide telemedicine services. In addition, VA did not provide information
                  on its future plans for the use of telemedicine or on its collaborative
                  telemedicine projects with other federal agencies.

                  VA believes that requiring health care professionals to be licensed in every
                  state where they practice could impose significant limitations on the
                  provision of health care. VA believes this requirement could significantly
                  hold back its expansion of the telemedicine program into states not
                  authorizing an exemption, limit the scope of its telemedicine activities to
                  providing consultative services in other states, and limit the enhancement
                  of its clinical delivery systems as telemedicine undergoes future
                  technological and clinical advances. We found, however, that exemptions
                  in various state laws would allow VA’s physicians and registered nurses to
                  use telemedicine to provide medical care. Over half of the state licensure
                  laws we reviewed provided an exemption for VA or other federal health
                  care professionals.12 Consequently, VA health care professionals licensed in
                  any state would be permitted to practice telemedicine in these states. In
                  addition, most of the 20 states we examined allow physicians who are
                  licensed in other states to provide consultative services to physicians who
                  are licensed in their state.


                  We provided copies of a draft of this report for review and comment to VA;
Agency Comments   DOD; OPM; BOP; the Coast Guard; and the Department of Health and Human
                  Services, which includes IHS and PHS Commissioned Corps. OPM, DOD, BOP,

                  11
                    VA did not provide information on where these practitioners are now licensed.
                  12
                    We reviewed 20 states’ laws that affect telemedicine within their borders.



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                           and the Coast Guard concurred with the sections of the report in which
                           they are mentioned. We have incorporated the agencies’ technical
                           comments into the report where appropriate. Other comments are
                           summarized in the following sections.


Department of Veterans     The Deputy Under Secretary for Health stated that VA generally agrees
Affairs                    with our report. He also stated that it is difficult to project the effect a
                           licensing change would have on telemedicine, since more than half the
                           states have not passed legislation pertaining to telemedicine. We believe
                           there could be a modest effect on VA’s use of telemedicine because
                           exemptions in some state laws we reviewed allow VA physicians to
                           practice telemedicine within their states. In addition, any future effect on
                           VA’s use of telemedicine will depend on whether and the extent to which
                           states make accommodations for VA.


Department of Health and   The Department agreed with the report’s overall assessment of the
Human Services             licensing situation. The Department believes it would not be in the best
                           interest of the government to require physicians and nurses to be licensed
                           in the state in which they practice in addition to the state in which they are
                           now licensed because of constant turnover, attrition, difficulty in
                           recruitment, as well as the disruption caused by the process. The
                           Department stated that patient care is of the utmost concern and should
                           not suffer because a physician or nurse has a license from another state.


                           As agreed with your office, copies of this report are being sent to the
                           Honorable Togo West, Secretary of Veterans Affairs; interested
                           congressional committees; and other interested parties. Copies will be
                           made available to others upon request.




                           Page 14                                        GAO/HEHS-99-106 Medical Licensing
B-279951




Please contact me at (202) 512-7101 or Ronald Guthrie, Assistant Director,
at (303) 572-7332 if you have any questions about this report. Other major
contributors to this report were Rachna Iyer, Lesia Mandzia, and Alan
Wernz.

Sincerely yours,




Stephen P. Backhus
Director, Veterans Affairs
  and Military Health Care Issues




Page 15                                      GAO/HEHS-99-106 Medical Licensing
Contents



Letter                                                                                    1


Appendix                                                                                 18

Scope and
Methodology
Table         Table 1: Number of Physicians Providing Medical Care Employed               3
                in Federal Agencies

Figures       Figure 1: Common Federal Physician Employment Requirements                  4
              Figure 2: Federal Agencies’ Additional Physician Employment                 8
                Requirements




              Abbreviations

              AMA       American Medical Association
              BOP       Bureau of Prisons
              DOD       Department of Defense
              HMO       health maintenance organization
              IHS       Indian Health Service
              NPDB      National Practitioners Data Bank
              OPM       Office of Personnel Management
              PHS       Public Health Service
              PPO       preferred provider organization
              VA        Department of Veterans Affairs


              Page 16                                      GAO/HEHS-99-106 Medical Licensing
Page 17   GAO/HEHS-99-106 Medical Licensing
Appendix

Scope and Methodology


             To accomplish our objectives, we (1) obtained and reviewed physician
             employment requirements and processes at VA; DOD; the Army, Navy, and
             Air Force; PHS Commissioned Corps; U.S. Coast Guard; Bureau of Prisons;
             and Indian Health Service; (2) identified and interviewed representatives
             of these and other federal agencies that employ physicians and discussed
             their physician employment requirements and processes; (3) surveyed
             representatives of selected private sector health maintenance
             organizations (HMO) and preferred provider organizations (PPO) on their
             physician employment requirements and processes; and (4) interviewed
             representatives of the American Medical Association; the Federation of
             State Medical Boards of the United States, Inc.; the National Council of
             State Boards of Nursing, Inc.; the National Association of VA Physicians
             and Dentists; and the Office of Personnel Management to obtain
             information on physician and registered nurse licensing requirements and
             processes, and the potential effect of requiring VA’s physicians and
             registered nurses to have licenses from the states where they practice; and
             (5) conducted literature searches on physician licensing to determine
             whether the state where a physician is licensed has an effect on quality of
             care.

             To compare VA’s physician employment requirements and processes to the
             private sector, we selected HMOs and PPOs that, similar to VA, operate in
             several states (that is, are geographically dispersed) and have at least a
             total of 1 million covered lives. We contacted 11 HMOs, which have a total
             of 34 million covered lives, and 4 PPOs, which have a total of 9 million
             covered lives, and obtained information about their physician employment
             requirements and processes and compared these with VA’s practices.

             To assess the potential effect of changing the licensing requirement on VA’s
             physicians and registered nurses and on the use of telemedicine, we
             obtained opinions from VA representatives and obtained information from
             VA on (1) the total number of physicians and registered nurses employed
             by VA, (2) where physicians and registered nurses are licensed and where
             they are practicing, (3) VA’s employment projections for physicians and
             registered nurses, and (4) limited information on the use of telemedicine.
             VA did not provide, after repeated requests, detailed information on the
             number of physician and registered nurse transfers for the last 3 years; on
             VA’s historic inability to recruit and retain physicians and registered
             nurses; or on how VA’s collaborative and future telemedicine projects
             occurring across state lines would be affected by H.R. 2338 and how many
             physicians and registered nurses are currently providing telemedicine




             Page 18                                       GAO/HEHS-99-106 Medical Licensing
           Appendix
           Scope and Methodology




           services, where they are licensed, and where they are providing care via
           telemedicine.

           Also, we obtained physician licensing information and credentials
           verification information from the American Medical Association (AMA), the
           Federation of State Medical Boards of the United States, Inc., and the
           National Council of State Boards of Nursing, Inc. We used this information
           to make licensure cost estimates. However, we did not verify the accuracy
           of the data provided by VA; the AMA; the Federation of State Medical Boards
           of the United States, Inc.; or the National Council of State Boards of
           Nursing, Inc.

           We conducted a literature search using EMBASE, Sociological Abstracts,
           Social Science Index, Dissertation Abstracts, Legal References Index,
           Healthstar, Medline, and Internet searches on “physician licensure relating
           to quality of care” from 1990 to the present. We also spoke with a broad
           range of individuals about medical licensing and quality of care.




(406151)   Page 19                                      GAO/HEHS-99-106 Medical Licensing
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