Lawsuit Challenges New Jersey’s Out-of-State Telehealth Licensing Law

New Jersey is facing a lawsuit stating that its out-of-state telehealth licensing law violates the constitutional rights of residents seeking virtual care with healthcare providers across state lines.

Filed in the United States district court in New Jersey, the plaintiffs include Shannon MacDonald, MD, a radiation oncologist at Massachusetts General Hospital in Boston, and Paul Gardner, MD, neurosurgical director of the Center for Cranial Base Surgery at UPMC, and “J.A.,” a minor and MacDonald’s patient. The lawsuit was filed on behalf of J.A. by his father and guardian, Michael Abell.

The lawsuit argues that New Jersey’s current licensing rules make it harder for J.A., who is a cancer patient, and others in similar circumstances to receive necessary care without traveling out of state. It also argues that the licensing rules violate the US Constitution’s Dormant Commerce Clause, Privileges and Immunities Clause, and the First and 14th Amendments.

During the COVID-19 public health emergency (PHE), as in-person care became increasingly restricted, numerous states waived or provided exceptions for out-of-state licensing requirements. New Jersey allowed out-of-state practitioners licensed in New Jersey to provide telehealth services to state residents. It also permitted practitioners not licensed or certified in New Jersey to provide telehealth services to residents if the practitioner held a valid license in another US state or territory.

However, many of these waivers have been eliminated with the expiration of national and state PHE declarations. Currently, New Jersey law prohibits telehealth visits with out-of-state practitioners if the practitioner does not have a New Jersey medical license.

The lawsuit states that J.A. was diagnosed with pineoblastoma, an aggressive brain tumor, at 18 months old. His physicians referred him to MacDonald in Boston. The treatment enabled J.A. to beat his cancer. However, he must continue to undergo scans once a year for the rest of his life to monitor the cancer’s return.

New Jersey’s current telehealth licensing law requires patients seeking specialty care out of state to decide whether to incur the cost of traveling to meet with the specialist for initial or follow-up consultations.

“Without telemedicine, patients suffering from rare cancers and diseases like J.A. must either forego lifesaving treatment or suffer by traveling out of state every time an appointment with a national specialist like Dr. MacDonald is needed,” the suit states. “Many cannot bear the burdens of frequent travel.”

Without the option of telehealth, J.A. and his family would not have been able to consult with all the specialists they needed due to “financial and time constraints,” the lawsuit further states. Even more recently, telehealth enabled J.A. to consult with MacDonald when an anomaly appeared on one of his scans.

Maintaining multiple licenses in different states places an administrative and financial burden on physicians, especially for specialists like MacDonald and Gardner, “who have national practices and only occasionally consult with or treat patients from New Jersey,” the suit notes.

Thus, the lawsuit argues that the licensing law violates the Dormant Commerce Clause and Privileges and Immunities Clause, which prohibits states from enacting laws that excessively burden interstate commerce in relation to local benefits. It also violates the First Amendment, which prevents the government from restricting conversations between patients and their providers, and the 14th Amendment’s Due Process Clause, which bans the government from limiting the ability of parents to direct their children’s medical care.

“Plaintiffs, who are New Jersey citizens and out-of-state specialists with patients in New Jersey, seek to vindicate their constitutional rights — and ensure they can continue to provide and receive — lifesaving care,” the lawsuit states.

Research has shown that visit volumes drop in the absence of cross-state telehealth licensing waivers.

In a study published last month, researchers examined data on patients in Colorado, Maine, and Wisconsin, where licensure waivers expired in mid-2021, and patients in California, Georgia, Indiana, New Hampshire, and New York, where waivers continued through June 2022.

They found that in states with expired waivers, patients with out-of-state telehealth relationships were less likely to participate in any visits from July 2021 to June 2022.