The patient location rule sounds straightforward. Where your patient is physically sitting during a telehealth visit is the state that governs your practice. Not where your office is. Not where you’re licensed. Where they are.
It’s called the situs rule, and it’s one of the most commonly misunderstood compliance realities in telehealth today. Providers who practice virtually across state lines without a license in the patient’s state are, by operation of law, practicing without a license in that state. That’s true even if the patient traveled without telling anyone. Even if the encounter is brief. Even if the patient has been yours for years.
More consequentially for individual practitioners: when a telehealth encounter falls outside your licensure, it may fall outside your malpractice coverage, too.
Understanding how the situs rule works, where the gaps typically appear, and what your professional liability policy actually covers when you practice via telehealth is one of the most important pieces of risk management you can do right now.
What Is the Situs Rule, and Why Does It Govern Telehealth?
The situs rule, also called the patient-location rule, is a foundational principle of medical and professional licensing law in the United States. Under this framework, the practice of medicine or any licensed healthcare service occurs in the state where the patient is physically present, not where the provider sits or where their primary practice is located.
This matters enormously for telehealth because the technology makes geographic distance invisible while the law does not. A nurse practitioner licensed only in California who conducts a telehealth visit with a patient physically located in Nevada is, legally, practicing in Nevada without a Nevada license. The fact that the provider never crossed a state line is irrelevant.
State professional licensing boards hold jurisdiction over clinical practice within their borders. Unlicensed practice in their state exposes the provider to investigation, disciplinary action, and in some circumstances referral for criminal prosecution, regardless of whether any harm occurred.
Who Is Actually at Risk Here? This Isn’t Just a Hospital Problem
The HUB International Healthcare Risk Services advisory that prompted this piece was written with provider organizations in mind, and the organizational exposure is real. But individual practitioners face meaningful risk too, and in some ways the exposure is more personal.
Here are the scenarios where individual telehealth providers most commonly encounter licensure gaps:
- Patients who travel or move. A patient establishes care with you in your licensed state, then travels to a second home, moves across the country, or relocates for work. They book their next telehealth visit from the new location. Neither of you thinks about licensure. That visit is now unlicensed practice in the new state.
- Snowbird and seasonal patients. Patients who divide their year between two states, common among retirement-age populations, may be in a different state during any given appointment without flagging it.
- You working remotely. The reverse scenario also carries risk. If a patient is in your licensed state while you’re temporarily working from another state, depending on that state’s interpretation of the situs rule, you may face obligations in the state where you’re sitting.
- Telehealth platforms that don’t verify patient location. Scheduling tools and intake workflows that rely on a patient’s “home address” rather than their physical location at the time of the encounter create a systematic gap across every visit.
None of these scenarios require negligent care to produce serious consequences. The licensure issue exists independently of clinical quality.
What Happens to Your Malpractice Coverage When You’re Unlicensed in the Patient’s State?
This is the question practitioners most need to understand, because the answer directly affects whether they have protection if something goes wrong.
Professional liability policies, including those available through CM&F, cover professional services you are legally authorized to perform within your scope of practice. That phrase does real work. “Legally authorized” means licensed in the jurisdiction where the service is being rendered.
An unlicensed telehealth encounter creates a condition where coverage may not apply. If a patient files a malpractice claim arising from a visit that occurred while you were practicing without a license in their state, your policy may exclude that encounter entirely. That means no defense, no indemnification, and potentially the full weight of any claim against you personally.
This isn’t a fine print technicality. It’s the logical consequence of practicing outside the legal boundaries that define your scope of coverage. The good news is that it’s entirely preventable.
Interstate Licensure Compacts: Helpful, But Not a Complete Answer
Multistate licensure compacts have made it meaningfully easier for eligible providers to maintain practice authority across multiple states. The Nurse Licensure Compact (NLC) provides multistate practice privileges for registered nurses and LPNs in member states. PSYPACT covers psychologists. The Counseling Compact and social work compact are in varying stages of adoption. The Interstate Medical Licensure Compact (IMLC) covers allopathic and osteopathic physicians.
These compacts are valuable tools and worth taking advantage of where eligible, but they have important limitations:
- Compact membership varies by state. Not every state participates in every compact, and that changes over time.
- Compact participation for one profession does not extend to other professions or provider types.
- Compact privileges do not automatically address prescribing authority, DEA registration, or state-specific controlled substance regulations when telehealth visits involve prescriptions.
- A compact privilege still requires the provider to meet the compact’s specific eligibility criteria; it is not automatic.
In practical terms: confirm whether the patient’s state is a current member of your applicable compact before any visit. Compact membership and scope evolve, and what was true when you last checked may not be true today.
What Can You Do Right Now to Close the Licensure Gap?
For most individual practitioners doing telehealth, the practical risk management comes down to intake process and awareness. Here’s a straightforward approach:
- Confirm patient location at every visit, not just at intake. The patient’s home address on file is not their location today. Build location verification into your telehealth scheduling and check-in, treat it as a required step, not an optional field.
- Know which states you’re covered in before scheduling. Keep a current list of every active license and compact privilege you hold, and map it to the states where you’re permitted to see patients via telehealth. If a patient’s location isn’t on that list, the visit needs to be rescheduled or redirected.
- Communicate clearly when a visit has to be declined. Patients who travel frequently appreciate being told in advance that telehealth visits from unlicensed states require rescheduling. Proactive communication is far easier than managing a complaint or board matter after the fact.
- Review your telehealth coverage with your carrier. If you’re unsure how your professional liability policy applies to multi-state telehealth encounters, that’s worth a direct conversation. Know the conditions under which coverage applies and understand the licensure requirements built into your policy.
- Monitor compact developments. State membership, scope, and provider-type eligibility change without much advance notice. Building a periodic check into your practice calendar, even just once or twice a year, keeps you from relying on outdated assumptions.
A professional liability policy from CM&F, backed by MedPro Group and rated A++ (Superior) by A.M. Best, covers telehealth services for all services within your scope of practice as defined by state law. That coverage follows you across platforms and across state lines where your licensure allows. It’s designed to support the way telehealth actually works. But the licensure piece is yours to manage, and it has to come first.
A Note on Where Enforcement Is Heading
Telehealth licensure enforcement has increased alongside the growth of virtual care. State licensing boards have opened investigations based on billing data, patient complaints, and cross-state referrals, not only on adverse outcomes. Federal enforcement agencies have incorporated telehealth licensure compliance into broader investigations, particularly where unlicensed practice coincides with billing to federal programs.
Many states also reverted telehealth licensure requirements to pre-pandemic levels after relaxing them during the COVID-19 public health emergency. Providers who built telehealth operations under emergency flexibilities and haven’t revisited their compliance picture since may be operating under assumptions that no longer hold.
The safest assumption: the rules are back, and they’re being enforced.
Frequently Asked Questions
- Does my malpractice insurance cover telehealth visits with patients in other states? Professional liability coverage generally applies to services you are legally authorized to perform within your scope of practice. If you see a telehealth patient in a state where you are not licensed, the encounter may fall outside your policy’s coverage entirely. Making sure your licensure is current in every state where your telehealth patients are physically located is a prerequisite for that coverage to apply.
- What is the situs rule for telehealth? The situs rule, also called the patient-location rule, holds that the practice of medicine or any licensed healthcare service occurs in the state where the patient is physically present at the time of the encounter, not where the provider’s office or license is based. A provider who delivers telehealth services to a patient in a state where the provider is not licensed is practicing without a license in that state under the laws of most states.
- Do interstate licensure compacts solve the multi-state telehealth licensure problem? Interstate compacts like the Nurse Licensure Compact (NLC), PSYPACT, and the Interstate Medical Licensure Compact (IMLC) streamline the process of obtaining multistate practice authority, but they do not eliminate licensing requirements. Providers still need an active license or compact privilege in each state where their patients are physically located. Compact participation varies by state and profession, and eligibility requirements apply; confirming current membership and your individual eligibility is still necessary before seeing telehealth patients across state lines.
