May Regulatory Update – This Month in Telehealth

There is no doubt that the rate of adoption of services delivered through telemedicine is gaining momentum, but one of the number one reasons touted for why services through telemedicine are not being embraced faster is because of reimbursement challenges.

This is a special edition of InSight Telepsychiatry’s Regulatory Report where we will break down what reimbursement sources are available, what challenges still exist and where progress has been made.

No two states are alike in how telehealth is defined and regulated.  Medicare reimbursement is available in all states but is highly underutilized due to specific location restrictions.  48 states and the District of Columbia provide fee-for-service Medicaid reimbursement for some form of live video. Massachusetts and Rhode Island are the only two states without definitive reimbursement rules for their public insurance program.  34 states and D.C. have laws that govern private payer telehealth reimbursement policies but the extent of the reimbursement varies widely by state.

Medicare- Federal

Here are a few things you need to know about Medicare and reimbursement for telemedicine services.

  • Distant Site:   Medicare reimburses for telehealth services offered by a healthcare provider at a Distant Site.
  • Originating Site: Location of the Medicare beneficiary (patient). In order to be eligible for Medicare reimbursement, the patient MUST be located in one of the locations below in an HPSA (Health Professional Shortage Area).
    • The types of originating sites authorized by law are:
      • physicians or practitioner offices
      • Hospitals
      • Critical Access Hospitals (CAH)
      • Rural Health Clinics
      • Federally Qualified Health Centers
      • Hospital-based or CAH-based Renal Dialysis Centers
      • Skilled Nursing Facilities (SNF)
      • Community Mental Health Centers (CMHC)
  • Health facilities can you this CMS tool to determine if they are in an HPSA.
  • Only certain CPT and HCPCS codes are eligible for reimbursement. See the 2017 CMS Telehealth Learning Resource in Resources below.
  • “GT” modifiers are required for Medicare and Medicaid billing.
  • Medicare reimburses telemedicine services at the same rate as the comparable in-person medical service, based on the current Medicare physician fee schedule.
  • Medicare will also pay the originating site a facility fee, as reimbursement for hosting the telemedicine visit.

Medicaid- State

Getting Paid through Medicaid

  • Medicaid reimbursement will vary widely state so you will need to look at each state individually to determine eligibility.

Criterion to research

  • Health Services covered
  • Eligible providers
  • Is a Pre-existing relationship with patient required and how can this relationship be established
  • Location restrictions on patient or provider
  • Visit Limits
  • Applicable CPT codes
  • Type of fee reimbursed (transmission, facility, or both)

Private Payers

Dealing with Private Payers

Many private payer insurance plans do reimburse for telehealth-delivered services; however, federal law does not require these payers to provide coverage for any type of telehealth-delivered service. Some states have passed their own private payer laws, affecting private payer plans that operate in those states. Currently, thirty-four states and DC have some private payer-related reimbursement laws. Some states mandate some sort of reimbursement, while others mandate reimbursement at the same level as in-person care under certain conditions.  Each private payer does telemedicine reimbursement a little differently. The good news is, many of the large insurance companies are seeing the benefits of telemedicine and starting to provide broader coverage.

  • The big insurance carriers (BCBS, Aetna, Cigna, and United Healthcare) cover telemedicine. The largest commercial payers do cover telemedicine. However, whether they will reimburse for a telemedicine service is policy-dependent and state-dependent, meaning one patient might be covered under their BCBS policy and another may not if their policy excludes telemedicine.
  • Call your payers and ask the right questions. Here are a few questions to ask when looking into eligibility with a payer.
    • Which CPT and HCPCS codes can be completed via telemedicine?
    • Are there any restrictions on the location of the patient or provider?
    • Do I need to use a modifier (GT)?
    • Does the reimbursement rate match the in-person rate?
    • Which providers are eligible?
    • Are there any specific notes that need to be included in the visit documentation?


Reimbursement for telehealth services may not have come as far as we might like but things are changing every day.  Over 200 pieces of telehealth-related legislation were introduced in the 2017 legislative period, where bills focused on changing existing reimbursement laws, developing telehealth licensure boards, and allowing telehealth to count towards network adequacy requirements for Medicaid and the private sector.

Bipartisan Senate Bill Seeks Medicare Coverage for Telemedicine (mobihealthnews)

The bipartisan Senate bill functions as an experiment: it requires the Center for Medicare and Medicaid Innovation (CMMI) to “test the effect of including telehealth services in Medicare health care delivery reform models.”

Read Telehealth Innovation and Improvement Act

Telemedicine: Reimbursement in Fee-For-Service, Quality Models (Urology Times)

Read more here

CPT Manual Lists 79 Codes that can be Billed if Telemedicine Used (AAP)

Read more here

Other Resources

ATA Gaps Report 2017: Coverage and Reimbursement
50 State Scan of Telehealth Reimbursement Laws and Medicaid Policies Factsheet
2017 CMS Telehealth Learning Resource

Workgroup for Electronic Data Interchange (WEDI) Telehealth Coding Report

Center for Connected Health Policy 50 State Report: Telehealth Laws and Reimbursement Policies




Inside Sources:


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