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In March 2002, the Governor of New Mexico signed the nation’s first law allowing psychologists to prescribe medications, effective July 1, 2002. That same month, the Medicare Payment Advisory Commission (MedPAC) considered a proposal authorizing direct Medicare reimbursement for marriage and family therapists and licensed professional counselors. A central argument in favor of both of these mental health policy options has been the shortage of mental health practitioners in rural areas and the hope that expanding the scope of practice and/or reimbursement will increase the rural mental health workforce, thereby improving access. This paper examines how state licensure laws may potentially affect the mental health workforce distribution, and makes recommendations for state and federal policy to reduce barriers that may have been created by the licensure process.


Rural communities suffer disproportionately from a shortage of mental health professionals (Knesper, et al., 1984; Lambert & Agger, 1995; Stuve, et al., 1989). As of September 1999, over 85 percent of the designated Mental Health Professional Shortage Areas in the United States were located in non-metropolitan (rural) counties. These areas are home to roughly 57 percent of the country’s rural population (Bird et al. 2001). Variations in the supply of mental health professionals may be an important factor in explaining persistent differences observed in access to and use of mental health services in rural versus urban areas (Lambert & Agger, 1995).

A number of studies have demonstrated that mental health professionals are differentially distributed in rural and urban areas, with psychiatrists and Ph.D. level psychologists tending to practice in urban and suburban areas, leaving mental health professionals with master's level preparation or less as the most readily available mental health providers in most rural areas (Hartley et al., 1999; Holzer, Goldsmith and Ciarlo, 1998; Goldsmith et. al., 1997). For example, the supply of psychiatrists is 14.6 per 100,000 in urban areas as compared with 3.9 per 100,000 in rural areas (Hartley et al., 1999).a

Distances to colleagues, lack of clinical support and personal preferences may partially explain why few mental health professionals choose to practice in rural areas (Ernst & Yett, 1985). However, state licensure laws that determine the criteria for licensure and the

a While national data for urban and rural supply of psychologists are not available, the most rural states have, on average, about 25% fewer psychologists per capita than the national average of 20 per 100,000 (Hartley, Bird and Dempsey 1999).


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