October 2026 government relations update

This October 2026 government relations update covers a month defined by AI accountability, telehealth licensure, and the security of state licensing systems.

Federal updates

AI chatbot privacy and transparency: the People-First Chatbot Act (H.R. 9619)

Rep. Valerie Foushee (D-NC) introduced the People-First Chatbot Act (H.R. 9619), which would set consumer privacy, transparency, and data-security requirements for AI chatbot providers.

Key provisions include:

• Restricting the use, sale, and extended retention of users’ personal data and chat logs.
• Requiring affirmative consent for certain advertising or model-training uses, and parental consent for users believed to be minors.
• Prohibiting retaliation against users who decline consent.
• Requiring clear disclosure that users are interacting with AI rather than a person.
• Giving users access to downloadable chat logs and options to delete them.
• Requiring providers to maintain data-security programs and conduct recurring risk assessments.

The bill’s consent and disclosure standards closely track requirements states are already applying to health care chatbots, including California AB 1979 (see “State updates” section below). Health care organizations that use chatbots with patients, employees, or licensees should expect these standards to shape procurement and vendor oversight, whether or not the federal bill advances.

Propelus takeaway: As boards, employers, and professionals adopt AI tools, trust depends on clear disclosure and responsible data practices. We are tracking federal and state AI proposals so our partners can evaluate new tools against the standards that are taking shape.

Expanding licensure pathways for internationally trained physicians (H.R. 10707)

The Internationally Trained Physicians Assistance Act of 2026 (H.R. 10707) aims to reduce the barriers immigrants and refugees face when entering the U.S. physician workforce. The bill would:

• Authorize the Secretary of Health and Human Services (HHS) to award grants to states to develop or expand alternative licensure pathways. Internationally trained physicians who are lawfully present immigrants, refugees, asylees, or otherwise authorized to work could practice under supervision while completing the United States Medical Licensing Examination (USMLE) steps.
• Require HHS to report to Congress within 180 days on the feasibility of removing the resident cap for medical residency programs.
• Fund direct assistance for physicians pursuing licensure, including exam fees, career counseling, English language classes, diploma verification, and test preparation.

The bill ties federal funding to state alternative licensure pathways, giving states a financial reason to create or expand them. For state medical boards, that means new supervised and provisional license categories to define, track, and transition to full licensure. For hospitals serving underserved communities, it creates a new route to physician staffing outside the residency cap.

Propelus takeaway: New license categories need clear rules for supervision, tracking, and conversion to full licensure. Propelus supports boards and employers in keeping credential data accurate as new pathways take shape, from license verification through continuing education compliance.

Third Circuit upholds New Jersey’s telehealth licensure requirement

The U.S. Court of Appeals for the Third Circuit affirmed the dismissal of MacDonald v. President of the New Jersey State Board of Medical Examiners. The case challenged New Jersey’s requirement that any physician providing telehealth services to patients located in New Jersey hold a New Jersey medical license, wherever the physician is located.

The three-judge panel unanimously rejected each claim. It found that New Jersey’s licensure framework does not unlawfully discriminate against nonresident physicians, does not place a constitutionally substantial burden on interstate commerce, and does not violate physicians’ or patients’ constitutional rights.

The decision supports the patient-location model of medical practice regulation, under which the state where the patient is located governs the encounter. It leaves intact the exception for certain out-of-state clinician-to-clinician consultations that do not direct patient care. For telehealth programs, the rule stands: physicians need a license in each state where their patients are located, or a compact pathway where one is available.

Propelus takeaway: Multistate practice depends on knowing that every clinician holds the right license in the right state at the right time. Propelus EverCheck verifies licenses across states against primary sources, and Propelus CE Broker helps professionals track requirements in every state where they hold a license.

State updates

With the November 3, 2026, midterm elections approaching, the key question for most stakeholders is which legislatures will accept bills before or immediately after Election Day. Virginia opened the earliest pre-filing window for the 2027 legislative cycle on July 20, 2026. The next major wave begins in November, with Texas on November 9 and New York on November 15. Organizations with 2027 priorities should have bill language and sponsors ready before these windows open.

AI in health care

California AB 1979

California AB 1979, enacted September 30, 2026, expands confidentiality protections and professional oversight requirements for AI-driven health care services. Businesses that offer health care chatbots and other digital health tools are now subject to the same legal standards as traditional providers, and licensed professionals keep authority over clinical decisions informed by AI.

The law places responsibility for AI-informed care with licensed professionals, which reinforces the role of licensing boards in overseeing how AI is used in practice. Expect other states to consider similar bills in 2027.

Propelus takeaway: Licensed professionals remain accountable for AI-informed care. As states define those expectations, we will track any new education or oversight requirements that follow so boards and professionals can plan ahead.

Board structure and function

New Jersey A 5404 and A 5466

New Jersey A 5404 would move oversight of midwives from the Board of Medical Examiners to a newly created Board of Midwifery. New Jersey A 5466 would authorize podiatric physicians to supervise physician assistants (PAs) and add a podiatric physician to the Board of Medical Examiners’ PA Advisory Committee.

Together, the bills reflect continued movement toward profession-specific boards and broader supervision models. A change in which board regulates a profession also changes where those licenses are issued, renewed, and verified.

Propelus takeaway: When oversight shifts between boards, licensing data, renewal cycles, and continuing education requirements need a clean transition. We work with boards and employers to keep compliance records continuous through structural changes.

Licensure compacts

Pennsylvania HB 2774

Pennsylvania HB 2774 would enact four interstate compacts in one bill: the PA Licensure Compact, the Social Work Licensure Compact, the Dentist and Dental Hygienist Compact, and the Audiology and Speech-Language Pathology Interstate Compact.

Joining four compacts at once would expand multistate practice options for four professions in one of the country’s largest health care workforces. Each compact has its own commission and implementation schedule. Practitioners can use compact privileges only after each commission begins issuing them, so timelines will vary by profession.

Propelus takeaway: Compacts expand where professionals can practice, and they add new credentials to verify and track. Propelus helps employers confirm licensure across states and helps professionals stay compliant wherever they practice.

Continuing education

Washington Board of Osteopathic Medicine and Surgery: final rule

On August 19, the Washington Board of Osteopathic Medicine and Surgery issued a final rule that allows licensed osteopathic physicians to meet continuing medical education (CME) requirements by participating in maintenance of certification with a member board of the American Board of Osteopathic Medical Specialties (ABOMS) or the American Board of Medical Specialties (ABMS) at the time of renewal.

The rule reduces duplicate requirements for physicians who already meet specialty certification standards. It also links state CME compliance more closely to board certification, an approach other states may consider.

Propelus takeaway: Aligning CME with certification reduces duplicate work for physicians. As renewal options expand, Propelus CE Broker helps boards and licensees keep a clear record of how each requirement is met.

Texas State Board of Pharmacy implements SB 912 CE compliance system

The Texas State Board of Pharmacy (TSBP), which oversees approximately 94,000 licensees, has selected CE Broker as its official continuing education (CE) tracking platform to support compliance with SB 912 (2025), which requires CE compliance prior to license renewal. TSBP joins the Texas Medical Board (TMB) and other licensing boards adopting CE Broker to facilitate renewal compliance. The platform is live, and all Texas pharmacists and pharmacy assistants must have a Basic Account and report compliance to renew a license.

Licensing system security

Alabama Board of Nursing restores online renewals after ransomware attack

On October 22, the Alabama Board of Nursing restored its online registered nurse license renewal system, about six weeks after a ransomware attack forced the agency to switch to paper applications. The incident may have exposed personal information belonging to nurses, applicants, and members of the public, including Social Security numbers, driver’s license details, and medical information. The FBI and the Alabama Law Enforcement Agency are investigating.

About 60,000 nurses with single-state licenses must renew by December 1, and the board has not extended the deadline. The board is restoring additional online services and advising potentially affected individuals to stay alert for phishing and identity theft.

The incident shows how much licensing operations depend on secure digital infrastructure. Expect boards and policymakers to focus more on data protection standards, continuity plans for renewal systems, and how quickly agencies can restore service after an attack.

Propelus takeaway: Licensing systems hold sensitive personal data and support mission-critical processes, but they can’t always do it alone. Third-party application integrations are essential to any licensure system, especially in the case of licensure renewals. Employers with Alabama nurses should confirm renewals ahead of the December 1 deadline, and ongoing license monitoring can help catch any lapse.

Medicaid fraud and unlicensed practice

Ohio physician and clinic manager plead guilty in $1.6 million Medicaid fraud scheme

Ohio Attorney General Andy Wilson announced that Dr. Patrick Muffley and Lisa Fillhart, office manager at Embody Wellness Obstetrics and Gynecology, pleaded guilty to felony charges in a Medicaid fraud scheme. The scheme involved more than 27,000 claims for telehealth services that were allegedly never provided between January 2021 and March 2026. Investigators found that Muffley falsified appointment records. Fillhart also admitted to misrepresenting herself as a nurse and practicing nursing without a license.

Fillhart was sentenced to 12 months of community control. Muffley is scheduled for sentencing in January and has agreed to pay restitution. The Ohio Department of Medicaid suspended his provider agreement in September.

The case continues a theme from June’s national health care fraud takedown: credential misrepresentation and unlicensed practice are often part of larger billing fraud. It also reflects growing state oversight of telehealth billing and public health care spending.

Propelus takeaway: Credential misrepresentation remains a common thread in health care fraud. Verifying licenses with primary sources at hire, monitoring them continuously, and screening against federal and state exclusion lists gives employers early warning. Propelus EverCheck brings these checks together in one platform.

Workforce data

ABMS releases 2025-2026 Board Certification Report and updated Data Viewer

On October 20, ABMS released its latest Board Certification Report and an enhanced Data Viewer. As of June 30, 2026, 1,020,705 physicians and medical specialists held active ABMS certification, and 796,162 were participating in continuing certification. The free Data Viewer lets users filter aggregated certification data by specialty, age, gender, geography, and reporting month.

Propelus takeaway: Reliable workforce data supports better policy and planning. Propelus connects licensure, verification, and continuing education data so boards and employers have a clearer view of workforce compliance.

Stay ahead with us

Through our unified solutions, Propelus CE Broker™, Propelus EverCheck™, and Propelus Immuware™, Propelus provides the infrastructure that connects boards, professionals, and employers in a single, secure ecosystem. As a leading CE tracking platform for license renewal compliance, we help our partners prepare for policy change before it arrives. Our goal is a workforce that is qualified, compliant, and ready for what comes next. Get in touch with Propelus CE Broker to learn how we can support your workforce.