Barriers to Healthcare Delivery: Telemedicine, Corporate Practice of Medicine and Licensure

Governing bodies have significant input into establishing telemedicine policy, and developing the required legal frameworks to deal with issues such as confidentiality, liability, and cross-border jurisdiction. In many instances, however, need dictates that eHealth and telemedicine initiatives are initiated prior to governance mechanisms.” -World Health Organization [1]

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Telemedicine, loosely defined as “[t]he delivery of health care services . . . using information and communication technologies for the exchange of valid information for diagnosis, treatment and prevention of disease and injuries,”[2] is an expanding and increasingly crucial aspect of healthcare delivery. As the need for telemedicine increases along with providers’ desire to implement telemedicine programs, many legal barriers to the adoption of both domestic and international telemedicine programs exist. The following sections explore barriers to both domestic and international telemedicine, focusing on U.S. state bans on the corporate practice of medicine as a critical barrier, as well as various barriers involved when U.S providers wish to deliver telemedicine services to patients in foreign countries.


Corporate Practice of Medicine

The Corporate Practice of Medicine Doctrine was first adopted by the American Medical Association.[3] In general, it banned large entities such as corporations from engaging in the practice of medicine or employing anyone who engages in the practice of medicine, including licensed physicians.[4] As of 2010, 30 states have adopted some form of the Corporate Practice of Medicine Doctrine.[5] Various rationales have long been offered for the justification of these doctrines, including the desire to restrict laymen from supervising the practice of medicine, inappropriate liability restrictions on the corporate form, and the inability of corporations to fulfill ethical and licensure requirements.[6] Those concerns, while legitimate and often necessary, must be balanced against the reality that telemedicine can provide a cost-effective and efficient alternative to conventional care. Given the fact that the United States spends 1.5 times more per person on healthcare than any other nation,[7] the justifications for the ban on corporate practice of medicine may no longer outweigh the benefits of eliminating the restriction altogether.

But what is the relationship between the Corporate Practice of Medicine Doctrine and telemedicine? It starts with the nature of telemedicine itself. Telemedicine overcomes geographical distances in order to provide healthcare services using any method other than in-person visits. For example, if a patient in rural Mississippi does not have access to a specialist in Neuropathology, the patient’s local hospital can send brain scans and other diagnostic information to a specialist at the Mayo Clinic for review. Other methods such as video conferencing are more advanced methods of the same practice: telemedicine. The prerequisite of a geographical disparity between patient and physician means that most often physicians and telemedicine patients will be in different states. Because the states are pretty evenly split regarding adoption of the Corporate Practice of Medicine Doctrine, the likelihood that the state in which the patient resides and the state in which the doctor practices will have antagonistic laws regarding the corporate practice of medicine is high.

However, that reason alone is not why corporate practice of medicine is such an issue. In states without bans on corporate practice of medicine, many of the providers that have the resources to provide comprehensive telemedicine services are large, corporate institutions that can afford those resources. The result is that the providers best suited and able to provide telemedicine services may be barred from doing so because it would constitute corporate practice of medicine in a state that prohibits the activity.[8] The disparity in state laws regarding corporate practice of medicine means that although some large healthcare provider entities wish to provide care to those in need of it in states other than their own, they would likely be in violation of the law and face harsh penalties for doing so.



Licensing requirements are a significant barrier to both domestic and foreign telemedicine. As a general rule, doctors who interact electronically with patients in a state other than the state where the doctor is located must also be licensed to practice in the patient’s state.[9] Providing telemedicine services in a state in which a physician is not licensed often amounts to unauthorized practice of medicine, which can result in both civil and criminal penalties.[10] The same goes for patients outside of the United States. A foreign country’s laws are sure to define the practice of medicine, and if it includes services that a doctor could provide through telemedicine, a U.S. based doctor who is not licensed in that country could be violating its laws. It is simply too impractical for a doctor who plans to actively practice telemedicine to attempt to get licensed in each state and/or country a patient may be located in in the future. It is increasingly difficult for foreign trained doctors to try and get licensed here in the U.S.[11] It would be unwise to assume that the situation would be much different for American doctors attempting to get licensed in other countries, especially when they do not maintain a place of business in the country.



Although many barriers to implementing domestic and international telemedicine programs still exist, growth in the telemedicine field has not been stifled yet. Since 2012, Shanghai East International Medical Center in China has partnered with the University of California at Davis, where sophisticated robots allow the chief of cardiology at UC Davis to consult with doctors in real time 6,100 miles away.[12] By utilizing narrow exceptions to the respective laws of each state and country, many hospitals are able to operate effective telemedicine programs.[13] The goal for the future is for healthcare regulators, states, and countries to work together to reform laws and adopt a framework that fosters growth in the telemedicine industry, while still ensuring proper oversight in order to protect the interests of patients and society as a whole. Imagine the advances in healthcare delivery that could be made if telemedicine providers were fostered by the regulatory framework in place, instead of having to navigate complicated exceptions to a framework not designed to accommodate technological breakthroughs.


[1] World Health Org., Telemedicine – Opportunities and Developments in Member States, Global Observatory for eHealth series - Volume 2, 51 (Jan. 13, 2011).
[2] WHO, A Health Telematics Policy in Support of WHO’s Health-For-All Strategy for Global Health Development, Report of the WHO Group Consultation on Health Telematics, (1998).
[3] Glenn Prives & Michael Schaff, The Corporate Practice Of Medicine Doctrine: Is it Applicable to Your Client?, 3 Am. Health Law. Ass’n Bus. L. & Governance 1 (2010).
[4] Id.
[5] Id. at Appendix A.
[6] Mich. Att’y. Gen. Op. No. 6770 (Sep. 17, 1993).
[7] U.S. President Barack Obama, Remarks by the President to a Joint Session of Congress on Health Care (Sep. 9, 2009).
[8] This proposition depends on other factors that include each state’s definition of the practice of medicine.
[9] Telehealth Resource Centers – Licensure and Scope of Practice, (last visited Mar. 4, 2016).
[10] Id. There are a number of exceptions to licensure that vary from state to state. Some examples are physician consults, educational purposes, and border states.
[11] Catherine Rampell, Path to United States Practice is Long Slog to Foreign Doctors, N.Y. Times (Aug. 11, 2013),
[12] Beth Kutscher, The long reach of medicine: International telemedicine becoming a growing force for U.S. hospitals, Modern Healthcare (Oct. 20, 2012),
[13] One of the most common exceptions is the physician-to-physician consult exception, which, depending on the jurisdiction, allows a primary care physician located in the same jurisdiction as the patient to consult with a doctor located elsewhere utilizing telemedicine technology. The local doctor is licensed to practice medicine, and the telemedicine doctor does not need to be licensed so long as he or she is consulting with a licensed doctor.