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Expansion of Telehealth in Arizona: Implications for Rural Healthcare Communities

By Miranda A. Preston, JD, Shareholder at Milligan Lawless, PC

Summer 2021

One of the silver linings of the COVID-19 pandemic is that it brought on a rapid transition to telehealth.  A Public Health State of Emergency (“PHE”), has existed in Arizona since March 11, 2020.  During the PHE,  Governor Ducey expanded access to telehealth in Arizona through a series of Executive Orders.[1]  However, all of the benefits achieved by the Executive Orders are set to expire at the conclusion of the PHE.  Legislative action was required to make the temporary telehealth exceptions permanent. 


In recognition of the benefits achieved by the temporary loosening of the telehealth requirements during the pandemic, on May 5, 2021, Arizona adopted a comprehensive telehealth bill (House Bill 2454, the “Bill”) that has the promise to drastically decrease barriers to healthcare access faced by residents of Arizona’s rural communities, as well as simplify the process for providing care to patients living in rural Arizona.  Two components of the Bill that could significantly benefit rural communities are provisions allowing physicians to provide telehealth via audio-only encounters, and allowing physicians who are licensed out of state to provide telehealth services to Arizona patients.

Audio-only Encounters and the Digital Divide

Telehealth has undoubtedly expanded access to care.  Despite that, there are concerns that its increased use will intensify health inequities among populations affected by the digital divide.[2]  Individuals living in rural areas are more likely to be disadvantaged by the digital divide than those living in urban areas.  This is because many individuals living in rural areas lack access to broadband internet,[3] which is a prerequisite for most telehealth platforms.  In Arizona, the percentage of residents with access to broadband internet ranges from an average of 93.7% of the population living in urban areas, to an average of 39.1% of the population living in rural areas. [4] In Apache County, less than 2% of the population has access to broadband internet.[5] 


Before the enactment of the Bill, telehealth services could not be provided via an audio-only encounter.[6]  The Bill now expressly permits audio-only encounters if the health care provider determines that, “an audio-visual telehealth encounter is not reasonably available due to the patient’s functional status, the patient’s lack of technology or telecommunications infrastructure limits,” provided that: (a) the provider and patient have an established relationship; or (b) if the provider and patient do not have an established relationship, that the services are for behavioral health or substance use disorders.[7]  Passage of the Bill means that residents of rural areas of Arizona who previously had limited or no access to broadband internet can now receive healthcare services (for which the providers will be reimbursed), via phone.


License Portability

Provider licensing has long been a significant barrier to the expansion of telehealth programs.  State licensure requirements are an important mechanism for the protection of patients. However, licensing can be a burdensome administrative process for physicians and their employers. [8] Before the enactment of the Bill, a healthcare provider could not provide care via telehealth to patients located in Arizona unless the provider was licensed in Arizona. [9]  During the pandemic Arizona passed an emergency measure allowing providers licensed in other states to treat patients in Arizona via telehealth, and many other states passed similar measures.  The Bill creates a permanent exception to Arizona’s provider licensing requirements, for providers who will provide telehealth to patients located in Arizona.  

Under this new exception, health care providers who are licensed in another state, and who have no prior disciplinary actions, can provide telehealth services to patients located in Arizona if the provider: (1) registers with their licensing board; (2) pays the registration fee; (3) complies with Arizona’s laws and regulations; and (4) consents to jurisdiction in Arizona for legal or disciplinary actions. These providers may not provide any in-person health care services to patients located in Arizona, or open an office in Arizona [10] without becoming licensed in Arizona . There are a few exceptions to the registration requirements, which are set forth in A.R.S. § 36-3606(E).  

This new licensing exception has the potential to drastically reduce the disparities in health outcomes between Arizona residents living in urban versus rural areas.  This means that Arizona’s rural residents will now have access to the medical services of a large number of additional physicians, including world-renowned specialists, where prior access was simply not possible.  



[1]  See, e.g., Executive Order 2020-15 Expansion of Telemedicine.

[2]  The “digital divide” is generally known as the diminished accessibility to technology based on various societal and social factors.

[3]  The Federal Communications Commission defines “broadband access” as fixed access to the internet at speeds of 25 megabits per second (mbps) download and 3 mbps upload or higher.


[5]  Id.

[6]  See A.R.S. § 20-841.09(E)(2) (Repealed effective May 5, 2021).

[7]  H.B. 2545, 2021 Leg., 55th Sess. (Ariz. 2021).

[8]  Consider the required licensing fees, credentialing processes, continuing medical education requirements, and compliance with varying state-specific laws relating to the practice of medicine.

[9]  Arizona has been a member of the Interstate Medical Licensure Compact (“IMLC”) since May 2016.  The IMLC created an expedited pathway to state licensure; it sets the qualifications for licensure and outlines the process for physicians to apply and receive licenses in states where they’re not currently licensed.  Arizona’s membership in the IMLC simplified the process for physicians to obtain licenses across state lines, thereby expanding the subset of patients that a physician could treat via telehealth. Despite that, prior to the enactment of the Bill, physicians providing telehealth services to patients located in Arizona were still required to be licensed in Arizona, albeit via a simplified process.

[10] “…except as part of a multistate provider group that includes at least one health care provider who is licensed in this state through the applicable health care provider regulatory board or agency.” A.R.S. § 36-3606(B)(1).

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