You must be authorized to practice in the state where the client is physically located at the time of the session. In 2026 that authorization can come from a full license, a PSYPACT privilege (psychologists, 42 jurisdictions), a Counseling Compact privilege (live in 6 states), or a state telehealth exception. None of these gets you paid in-network without separate payer credentialing in that state.
Where your office sits and where the client's insurance plan is based decide nothing. The client's physical location at session time decides which license you need, and every other rule in this article follows from that one.
Which state's license do I need for a telehealth session?
The state where the client is sitting during the session. Practice is legally deemed to occur at the client's physical location, so a therapist licensed only in New York who holds a video session with a client vacationing in Florida is practicing in Florida, under Florida's rules. Where you are located matters to your own board; where the client is located decides whether you're practicing without a license.
This is why "my client's plan is a national plan" doesn't help. Licensure is a state-board question, not an insurance question. A handful of states offer narrow exceptions, such as temporary-practice windows for existing clients who are traveling, or out-of-state telehealth registrations, but each is state-specific, and most have day limits and registration requirements. Verify with the destination state's board before the session, not after.
Where do the compacts actually stand in 2026?
Three licensure compacts matter to therapists, and they are in very different places. PSYPACT is mature, the Counseling Compact is newly live in a handful of states, and the Social Work Compact is enacted but not yet issuing anything. There is no operational compact for LMFTs.
| License | Compact | 2026 status |
|---|---|---|
| PsyD / PhD | PSYPACT | Operational. 42 jurisdictions enacted (40 states plus D.C. and the Northern Mariana Islands). Requires an ASPPB E.Passport for telepsychology authority. |
| LPC / LMHC | Counseling Compact | Issuing privileges in 6 states as of mid-2026 (AZ, GA, IN, LA, MN, OH) via CompactConnect; 32 more states plus D.C. enacted and in implementation. |
| LCSW | Social Work Licensure Compact | Enacted in 32 states as of May 2026, but the multistate license application is not open yet. No practice authority today. |
| LMFT | None operational | AAMFT dropped the compact route in favor of the Access MFTs portability model, which speeds relocation licensure but grants no telehealth privilege. |
Read the table conservatively. "Enacted" means a legislature passed the bill; it does not mean you can practice there. A Counseling Compact privilege only works between two live states: your home state and the client's state both have to be issuing and receiving privileges. Membership counts have changed every few months since 2024, so check psypact.gov, counselingcompact.gov, or swcompact.org the week you need them.
Social workers, in mid-2026, have no compact pathway at all despite 32 member states, because the application portal hasn't opened. LMFTs have nothing on the horizon. For both, practicing across state lines still means full licensure by endorsement in the second state.
Do compacts solve insurance credentialing too?
No. A compact privilege is practice authority from a licensing board. Getting paid in-network is a contract with a payer, and payers credential you per plan, per state. A PSYPACT psychologist in Missouri with an Illinois client can legally hold the session; whether Blue Cross and Blue Shield of Illinois pays for it is a separate question with a separate application.
BCBS is the sharpest version of the problem, because it's 33 independent licensee companies, and the Blue that credentialed you at home has no authority in the next state. National payers like Aetna, Cigna, and UnitedHealthcare can often extend an existing contract to a second state, but you still have to request it, add the state to your CAQH ProView practice locations, and wait for the plan to load it. Which panels are worth that effort is its own decision. See which panels to join and the billing mechanics of telehealth claims. Medicaid never crosses state lines at all; each state program requires its own enrollment.
What happens when an existing client moves?
The safest move is to pause sessions until you've confirmed authority in the new state. Continuity of care is not a legal exception unless the destination state explicitly grants one, and boards have disciplined therapists for exactly this. The common failure runs on the academic calendar: a client moves home for the summer, the therapist keeps billing telehealth sessions on the assumption that an enacted-but-not-live compact state counts, and every session from the new state is unlicensed practice. Twelve sessions billed over a summer is twelve claims the payer can recoup in the fall, because the therapist was never credentialed with the new state's plan.
Your options, in order of speed: a compact privilege if both states are live; the destination state's telehealth registration or temporary-practice exception, if one exists; full licensure by endorsement (weeks to months); or a warm referral to a local clinician with a documented closing session. Out-of-network self-pay fixes the payment problem, not the license problem.
A client traveling briefly is the same rule, smaller stakes. Some states explicitly permit short-term continuity care for a visiting client; many are silent. If the client is in another state for more than a vacation, treat it as a move.
What does a realistic two-state expansion look like?
Pick the second state before you need it, usually where clients keep moving or the metro just across your border, and run licensure and credentialing in parallel, because credentialing is the slower half. A workable sequence: month one, obtain authority (compact privilege in minutes if eligible; endorsement application if not). Month one as well, add the state to CAQH and submit payer applications, starting with your best-performing panels. Months two through four, wait out credentialing timelines while your license-by-endorsement processes. Only advertise availability in the new state once both halves are done.
Keeping the two tracks straight (board application, compact privilege, CAQH location, four payer applications, each on its own clock) is exactly the kind of multi-payer paperwork paneled.ai was built to run for you.
CLIENT LOCATION
- Confirmed the state where the client will physically be during sessions (not their billing address, not their plan's home state)
- Asked about upcoming moves, college semesters, or extended travel
PRACTICE AUTHORITY (pick one, verify the week of the first session)
- I hold a full license in the client's state, OR
- I hold a compact privilege covering that state. PsyD/PhD: the PSYPACT map at psypact.gov shows the state as participating, and my E.Passport / APIT is active. LPC/LMHC: counselingcompact.gov shows BOTH my home state and the client's state as live, and the privilege is purchased in CompactConnect. LCSW: the Social Work Compact is NOT issuing licenses yet, so I need a full license in the client's state. LMFT: no compact, so I need a full license in the client's state. OR
- The client's state offers a telehealth registration / temporary-practice exception, and I have completed it: [EXCEPTION + CONFIRMATION #]
PAYER SIDE (if billing in-network)
- The client's plan operates in their state and my contract covers it (for BCBS: the local Blue licensee, not my home Blue)
- New state added to my CAQH ProView practice locations; re-attested
- Credentialing application submitted or effective date confirmed: [DATE]
- Telehealth benefits verified for this client: copay [$], POS 10 covered
DOCUMENTATION
- Client's session-time location recorded in the intake note
- Emergency contact + local crisis resources for the client's actual city
- Malpractice carrier confirmed my policy covers practice in that state
Common questions
- Can I see a therapy client who lives in another state over telehealth?
- Only if you are authorized to practice in the state where the client is physically located during the session. Your home-state license alone is not enough. Authorization can come from a full license in that state, a compact privilege (PSYPACT for psychologists, the Counseling Compact where it is live), or a state-specific telehealth registration or exception.
- Is the Counseling Compact active in 2026?
- Partially. As of mid-2026, six states (Arizona, Georgia, Indiana, Louisiana, Minnesota, and Ohio) are issuing and receiving privileges to practice through CompactConnect. More than thirty additional states plus D.C. have enacted the compact and are working toward going live. Check counselingcompact.gov before relying on any state.
- Does a PSYPACT or compact privilege mean insurance will pay me in the new state?
- No. A compact privilege solves the license problem only. To bill in-network for a client in another state, you still have to be credentialed and contracted with that client's plan in that state. With BCBS in particular, the Blue in the new state is a different company with its own credentialing process.
- What do I do when an existing client moves to another state?
- Pause scheduled telehealth sessions until you confirm you can legally practice where the client now lives. Check whether that state offers a compact privilege, a telehealth registration, or a temporary-practice exception for continuity of care. If none applies, refer the client to a local provider and document the transition.
The paneled.ai team · Credentialing specialists. We file and track insurance credentialing applications for behavioral health providers every day — these guides come from what we see go wrong (and right) in real applications.