A nurse licensed in Virginia cannot simply drive across the border and start treating patients in West Virginia. Despite sharing geography and often sharing patients, each state maintains its own licensing requirements, its own application process, and its own fees. Multiply this across fifty states and you have a regulatory patchwork that predates telehealth, workforce shortages, and the realities of modern healthcare delivery.

Interstate licensing compacts offer a structural answer to this fragmentation. These are formal agreements between states that create standardized pathways for healthcare professionals to practice across member jurisdictions—without obtaining a separate license in each one. They work within the federalist framework rather than trying to override it.

Over the past decade, compact adoption has accelerated significantly. But the distance between elegant policy design and full nationwide implementation reveals familiar tensions in American governance—between state sovereignty and practical necessity, between regulatory control and workforce flexibility. Understanding where compacts stand today matters for anyone invested in how healthcare delivery actually works.

The interstate compact is not a new invention in American governance. States have used compacts to manage shared rivers, coordinate emergency responses, and resolve boundary disputes for well over a century. But applying this legal framework to healthcare professional licensing gained real traction only in the late 1990s, when the National Council of State Boards of Nursing began developing what would become the first healthcare licensing compact.

The Nurse Licensure Compact, launched in 2000, was the pioneer. It allows registered nurses and licensed practical nurses to hold a multistate license in their home state and practice in other compact member states without obtaining additional licenses. The Enhanced NLC, adopted in 2018, strengthened uniform licensure requirements and now counts more than 40 member states—covering a substantial majority of the American nursing workforce.

Other professions followed. The Interstate Medical Licensure Compact, operational since 2017, creates an expedited pathway for physicians to obtain licenses in participating states. The Psychology Interjurisdictional Compact, Physical Therapy Compact, EMS Compact, Counseling Compact, and several others each address their respective professions. More than a dozen healthcare-specific compacts now exist or are in active development, spanning a widening range of clinical disciplines.

What distinguishes compacts from simple reciprocity agreements is their legal architecture. Each compact operates as identical legislation enacted by every member state, typically administered by an interstate commission with representatives from participating jurisdictions. This structure creates genuine governance authority—the commission can set standards, collect data, and enforce compliance. It is a design that carefully balances state sovereignty with interstate coordination, and that balance shapes both the model's political appeal and its inherent limitations.

Takeaway

The compact model works precisely because it respects state authority while creating a binding framework for coordination—a design principle that explains both its political viability and its deliberate pace of expansion.

The evidence on compact effectiveness, while still developing, points to measurable impacts on workforce mobility. States participating in the Nurse Licensure Compact have documented increases in nurses holding multistate licenses, particularly in border communities and rural areas where cross-state practice is most practically relevant. For individual clinicians, compact membership eliminates weeks or months of redundant paperwork, duplicative fees, and administrative uncertainty.

The COVID-19 pandemic functioned as an unplanned stress test for the entire model. Many states issued emergency executive orders temporarily waiving licensing barriers, but these were stopgap measures with expiration dates. States already participating in compacts had a durable legal framework for deploying healthcare workers across state lines without emergency improvisation. The experience visibly accelerated legislative interest—several states fast-tracked compact legislation in 2020 and 2021 that had been stalled in committee for years.

Telehealth has further amplified the compacts' practical significance. As virtual care delivery expanded, the fundamental mismatch between state-based licensing and borderless digital healthcare became impossible to ignore. A psychiatrist in Ohio treating a patient who relocates to Indiana should not need a separate license for a continuing video appointment. Compacts offer the most straightforward legal pathway to resolve this tension, and telehealth employers have become among the strongest advocates for compact expansion.

But implementation data also reveals important limits. Compact participation removes a regulatory barrier—it does not, by itself, redistribute the workforce. States with severe shortages benefit most when compact adoption is paired with recruitment incentives, scope-of-practice reforms, and investment in underserved communities. Licensing mobility is a necessary condition for better access in many areas, but it is rarely a sufficient one on its own.

Takeaway

Removing a barrier is not the same as solving a problem. Compacts enable workforce mobility, but mobility only translates into better access when paired with the economic and structural conditions that attract clinicians to where they are actually needed.

Despite growing momentum, compact adoption remains uneven across states and professions. Not every state has joined every available compact, and the reasons for holdout range from substantive policy disagreements to simple bureaucratic inertia. Understanding these barriers is essential for anyone trying to predict—or accelerate—the trajectory of compact expansion.

Revenue loss is a persistent concern. State licensing boards generate income from application and renewal fees. When a compact reduces the number of out-of-state applications a board processes, it directly affects that board's operating budget. For states that currently attract large numbers of out-of-state applicants, joining a compact means accepting a meaningful revenue reduction without a clear mechanism to replace it. This financial reality gives licensing boards an institutional incentive to resist.

Regulatory control is the other major friction point. States with stricter licensing standards sometimes view compacts as a potential dilution of their requirements. The compact model addresses this through uniform baseline standards that all members must meet, but negotiating those standards across dozens of jurisdictions inevitably involves compromise. Professional associations and licensing boards can become formidable opponents when they perceive compacts as encroaching on their authority or lowering the bar for entry into practice.

The most effective expansion strategies combine multiple levers. Federal incentive programs encourage adoption by tying compact participation to funding opportunities. Model legislation reduces the drafting burden on state legislators. And coalitions that unite healthcare employers, consumer advocates, telehealth companies, and governors' offices have proven far more effective than any single stakeholder lobbying alone. The states that adopt compacts fastest tend to be those where political leadership aligns with organized stakeholder support—a combination sufficient to overcome entrenched institutional resistance.

Takeaway

Policy adoption is rarely blocked by the strength of opposing arguments alone—it is blocked by the alignment of institutional interests. Compact expansion depends less on proving the policy works and more on reorganizing the political incentives around it.

Interstate licensing compacts represent one of the most pragmatic tools available for modernizing healthcare workforce regulation. They do not require a federal overhaul or a constitutional argument. They work within the existing structure of American federalism, which is precisely what makes them politically viable.

Their expansion over the past decade signals a genuine shift in how states approach professional regulation—moving incrementally from pure autonomy toward coordinated standards that reflect how healthcare is actually practiced and delivered today.

The remaining barriers are real but not structural. They are political and institutional. The central question is no longer whether licensing compacts work as a policy mechanism. It is whether the political will exists to make them the norm rather than the exception.