Will Medicaid Cover my Telehealth?

Telehealth is rapidly becoming accepted as a cost-effective alternative to traditional face-to-face consultation or examination between providers and consumers, as well as means of addressing a nation-wide shortage of health care providers across all fields.

The most common means of covering telehealth services among the United States is to incorporate coverage into the Medicaid program.

Reimbursement for Medicaid-covered services must satisfy federal requirements of efficiency, economy and quality of care.

Since 1999, Medicare reimbursement for all kinds of telehealth services have expanded, requirements of providers have been reduced, and grants have been given to support telehealth program adoption.

For 2014, the Center for Medicare and Medicaid services (CMS) does cover telemedicine services, including telepsychiatry in many areas.

Telehealth Services Covered by Medicare

Services covered by Medicare must fall into either Category 1 or Category 2. As of now, these categories are defined as such:

Category 1: Services that are similar to professional consultations, o¬ffice visits, and office psychiatry services that are currently on the list of telehealth services. The request is evaluated based on the similarities between the services already eligible for reimbursement, and that of the requested service.

Category 2: Services that are not similar to the current list of telehealth services. The assessment will be based on whether the service is accurately described by the corresponding code when delivered via telehealth, and whether the use of a
telecommunications system to deliver the services produces a demonstrated clinical benefit to the patient. Supporting documentation should be included.

Medicare Telehealth Coverage Areas

There are several conditions to Medicare telehealth coverage. The first being that the consumer, or individual receiving telehealth services must be physically located in an “originating site” that is eligible for Medicare coverage.

Those sites include:
• A health Professional shortage area (HSPA).
• Outside a Metropolitan Statistical Area (MSA)
• Within a MSA rural census tract determined by HHS’s Office of Rural Health Policy. (More here)
• Rural areas as defined by the department of health and human services (HRSA)

You can find out if your location is covered by these conditions here: Medicare Telehealth Payment Eligibility Analyzer here.

There are also entities that participate in a federal telemedicine demonstration project approved by or receiving funding from the Secretary of the Department of Health and Human Services that qualify as originating sites regardless of their location. These include:
• The offices of physicians or practitioners
• Hospitals
• Critical Access Hospitals (CAH)
• Rural health clinics (RHC)
• Federally Qualified Health Centers (FQHC)

All telemedicine encounters must take place in real-time, face-to-face interactions using audio and video equipment at both consumers’ and physicians’ locations.

State Specific Information

States have the option/flexibility to determine whether or not to cover telemedicine. They may also decide:
• What types of telemedicine to cover
• Where telemedicine will be covered throughout the state
• How telemedicine services are to be covered/reimbursed
• What types of providers/practitioners can be covered/reimbursed
• How much to reimburse for telemedicine services (as long as payments do not exceed Federal Upper Limits)

Individual states are encouraged to use flexibility granted by federal law to create payment methodologies that incorporate telemedicine technology. For example, sates can reimburse the practitioner at the distant site an reimburse a facility fee to the originating site. States can also reimburse support costs like technical support, transmissions charges, and equipment. Add-on costs like those can be incorporated into the fee-for services rate or separately reimbursed as an administrative cost by the state.

If a state decides to cover telemedicine, but not to cover certain areas or certain practitioners, then the state must be responsible for assuring access and covering face to face visits by recognized providers in those parts of the state where telemedicine is not available.

42 states now provide some form of Medicaid reimbursement for telehealth services. For a complete list, visit the NCSL website.

Provider and Facility Guidelines
Medicaid requires that all providers practice within the scope of each state’s State Practice Act. Some states have legislation that requires telemedicine practitioners have valid state licenses in the state where the services are being received, as well as where the practitioner is located. All requirements or restrictions placed by the state are binding under current Medicaid rules.

Understanding Telemedicine Terms From this Article:

Originating Site: Physical location of consumer, the person receiving the services from a physician

Distant or Hub site: Site at which the physician or practitioner is located

Real-time: For the purposes of telemedicine, real-time encounters take place between a practitioner and a consumer with no delay between the sharing and receiving of information and resources.

Store and Forward (Asynchronous): As opposed to real-time, store and forward is a telecommunications technique in which data is transferred from one site to another through the use of a camera or recording device and stored until the receiving party is ready to open it. Email is a type of store and forward technology. Store and forward communications are not considered telemedicine (unless services are received in Hawaii or Alaska), but may be utilized to deliver services as well.

Medical Codes: States select from a variety of codes to identify, track, and reimburse, for telemedicine services.


  • 2013. Gilman, M., & Stensland, J. Telehealth and Medicare: Payment Policy, Current Use, and Prospects for Growth.
  • http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Delivery-Systems/Telemedicine.html
  • http://www.hrsa.gov/ruralhealth/policy/definition_of_rural.html
  • http://www.ncsl.org/research/health/state-coverage-for-telehealth-services.aspx


daniaylastein1Daniayla Stein lives in the DC area as a Digital Communications professional and Graphic Designer. Daniayla is passionate about helping people help themselves through information and advocacy and frequently writes on behavioral health issues, healthcare policy, as well as the occasional poem or two. She graduated from Beloit College in 2012 with a degree in Anthropology and Creative Writing.

Follow Daniayla on twitter here: @DaniaylaS

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