Telehealth Credentialing: Navigating Provider and Patient Location Requirements

Why Your Physical Location Matters in Telehealth

Many providers assume telehealth means location doesn’t matter. That’s not true. Both where the provider is located and where the patient is during the visit affect licensing, credentialing, and reimbursement.

Understanding these rules is key to:

• Avoiding legal issues related to cross-state practice.
• Getting reimbursed for telehealth visits.
• Staying compliant with state licensing boards.

Ignoring these regulations can result in denied claims, penalties, and even disciplinary action from state medical boards.

Providers Must Be Licensed in the Patient’s Location

A provider must be licensed in the state where the patient is physically located during the telehealth visit. This is a legal requirement in most states.

Here's a realistic example:

A therapist is licensed in Texas and offers virtual counseling. One of her long-time patients travels to Colorado and books a telehealth session. Even though the therapist is working from her office in Texas, she must hold a Colorado license to legally provide care during that session. If she doesn’t, she is practicing without a license, which can lead to legal consequences.

Many providers assume their home state license is enough. But in telehealth, the patient’s location determines the legal requirements—not the provider’s.

Providers Must Confirm the Patient’s Location

Before starting a telehealth session, providers should confirm and document the patient’s physical location. Many states require this as part of telehealth compliance.

Why does this matter?

• State laws apply where the patient is physically located.
• Insurance may deny claims if the provider isn’t credentialed for the patient’s location.
• In an emergency, providers must know the patient’s location to send help.

How should providers confirm location?

• Ask the patient to state their address at the start of every session.
• Document the address in the medical record.
• Ensure the location is allowed under state laws and payor rules.

Not following this step can result in serious legal risks, including practicing without a license in an unauthorized state. Refer to Federal legislation and policies related to telehealth here.

Why Insurance Payors and State Boards Care About Location

Licensing laws and payor credentialing rules exist to protect patients and regulate healthcare across state lines.

• State Licensing Laws – Medical boards regulate providers based on where the patient is located at the time of service. (AAFP)
• Insurance Credentialing – Payors require providers to be licensed in the patient’s state before approving telehealth claims.
• Legal Compliance – Practicing without a valid license in a patient’s state can lead to disciplinary action, fines, or worse.

Cross-State Licensing

Telehealth is especially tricky in border regions, where patients often travel between states for care.

A primary care provider in Kansas City, Kansas, has many patients who live just across the river in Kansas City, Missouri. Even though the two cities are only miles apart, Kansas and Missouri have separate medical boards and licensing rules. The provider must be licensed in both states to legally see Missouri-based patients via telehealth.

Some states have reciprocity agreements or allow telemedicine-specific licenses, but others require a full medical license before telehealth services can be provided across state lines. (CCHPCA)

How Patient Location Affects Reimbursement

Even if a provider is properly licensed, insurance payors also have location-based rules that affect reimbursement.

• Medicare – Requires the patient to be in an eligible location for reimbursement. Temporary waivers may expand coverage.
• Medicaid – Rules vary by state. Many require both the provider and patient to be in-state for telehealth services to be covered.
• Commercial Payors – Typically require the provider to be credentialed in the patient’s state at the time of service.

Failing to comply with both state licensing laws and insurance credentialing rules can result in denied claims and financial losses for the provider.

How to Stay Compliant with Telehealth Credentialing

1. Check licensing laws in every state where you plan to see patients.
2. Verify payor policies regarding out-of-state telehealth services before billing.
3. Document patient locations at every telehealth visit.
4. Monitor changes in state regulations and telehealth compacts that may impact licensing requirements.

Telehealth Without Borders? Not So Fast.

Telehealth allows providers to reach patients anywhere—but legal and credentialing rules still apply across state lines. Providers must be licensed where their patients are located and confirm patient location before every session.

Failing to follow these rules can result in denied claims, legal trouble, and loss of licensure. Before expanding telehealth services across state lines, providers should verify licensing, credentialing, and insurance requirements.

Need help navigating telehealth credentialing? pie Health can simplify the process. Additionally, for insights on how your practice location affects credentialing, you can refer to our previous article Let’s Address Addresses: How Your Location Affects Credentialing.

Useful Resources for Telehealth Compliance

For providers navigating telehealth credentialing, licensing, and compliance, the following resources offer official guidance from the leading regulatory bodies overseeing telehealth in the U.S.:

• U.S. Department of Health and Human Services (HHS) – Telehealth Policy Guide
  • The HHS Telehealth Policy page outlines federal telehealth regulations, including licensure requirements, HIPAA compliance, prescribing rules, and Medicare/Medicaid telehealth coverage.
  • Visit: telehealth.hhs.gov
• Centers for Medicare & Medicaid Services (CMS) – Telehealth Toolkit
  • CMS provides detailed guidance on telehealth services, reimbursement rules, and state-by-state licensing requirements for Medicare and Medicaid.
  • Access the toolkit: cms.gov
• Interstate Licensure Compacts & Reciprocity
  • Some states allow out-of-state telehealth practice through licensure compacts or reciprocity agreements. Check state participation and eligibility at:
  • Telehealth Licensure Compacts

By staying informed through these official resources, providers can avoid compliance issues, ensure proper licensing, and prevent claim denials when delivering telehealth services.