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How to Get Paid for Telemedicine Services

by Nicole Ludington on October 4, 2017 at 10:47 AM


Telemedicine services are a hot topic in healthcare as medical practices and hospitals look to deliver patient care in an efficient and cost effective manner while at the same time patients seek out options to see their doctor remotely. The federal Department of Health and Human Services (HHS) stated plainly that “telehealth holds promise as a means of increasing access to care and improving health outcomes.” However, in the same report, HHS identified reimbursement and the payment environment for telemedicine as the first issue hindering its widespread adoption.

Therefore, although a part of the decision to offer telemedicine depends on your practice model and patient population, another aspect to consider is a strong, strategic foundation to ensure proper reimbursement for telehealth services. A lack of understanding about how Medicare, Medicaid and commercial payers reimburse for telemedicine visits has understandably prevented many providers from adopting the technology. However, as value-based care becomes the norm for medical billing and coding, it’s important for providers to understand the nuances of the three major payers and telehealth reimbursement.


With 49 million Americans enrolled in Medicare, it’s important to understand that Medicare reimbursement is dictated by the originating site, the type of technology and the provider type. The list of telemedicine CPT codes has been proposed to expand in 2018 under the new Physician Fee Schedule, but the current list of covered services is available online.

Related: Why Healthcare Consumerism is Changing Modern Payment Methodology

Medicare requires that the patient setting, known as the “originating site,” be a clinical site such as a doctor’s office, hospital or nursing facility. Medicare currently only covers telemedicine when the Part B patients located in a defined rural area, designated as in a Professional Shortage Area or a county outside of a defined Metropolitan Statistical Area, limiting the number of patients eligible to take advantage of telemedicine services.

Medicare defines reimbursable telemedicine as interactions between a healthcare professional and a patient via real-time audio-video technology. Reimbursement through Medicare is currently limited due to “originating site” restrictions, but many Medicare Advantage enrollees are currently covered for telemedicine services, regardless of location, signaling a positive sign for the future.


The District of Columbia and 48 state Medicaid programs have some type of telemedicine coverage. However, the policies vary from state to state, giving each program flexibility to determine how it will reimburse for telehealth. Each year, additional states have expanded their scope of reimbursement beyond Medicare. In fact, many have started to include Medicaid.

As always with Medicaid, it is important for providers to review their state-specific policies. The American Telemedicine Association’s report, State of Telemedicine Gaps Report, is a great starting point for determining reimbursement requirements.

In contrast with Medicare, many state Medicaid programs see telemedicine as patient location-agnostic. 24 states do not specify a patient setting as a condition for reimbursement, and 25 states recognize the patient’s home as an originating site. In terms of technology, a broad range of options from telephone and remote monitoring to video conferencing are reimbursable as there is no one policy across all state Medicaid telemedicine programs. There is also a strong trend within Medicaid towards embracing more provider types, such as mental and behavioral health.

Commercial Payers

Commercial payers have embraced telemedicine programs, steadily broadening coverage in response to population demand as well as state-based regulation. Today, 32 states and the District of Columbia have telemedicine parity laws requiring commercial payers to provide comparable coverage and reimbursement for telemedicine services as in-person services, though variations exist. The Center for Connected Health Policy breaks down parity laws on a state-by-state basis and will help providers get a sense of the opportunities and limitations of these regulations.

Commercial insurers are still grappling with issues such as building telemedicine codes into claims systems and determining their level of coverage for specialist services such as behavioral health. However, reimbursement through private insurance payers is the least confusing and most promising. The high potential for cost savings in the commercial sector, an average savings of over $100 a visit, has incentivized many payers to increasingly cover telemedicine.

Technology Needs

Due to the dynamic nature of healthcare innovation, the next decade will define the future of telemedicine in the United States. Even the most restrictive of the three largest payers, Medicare, is taking steps toward rewarding telemedicine practices through quality improvement activities under the Medicare Access and CHIP Reauthorization Act (MACRA). However, the key to ensuring proper payment across the spectrum is to ensure your patient is from a covered originating site and your technology meets minimum standards.

As a condition of payment for most telemedicine services, an interactive audio and video telecommunications system must be used that permits real-time communication between you, the physician or practitioner at the distant site, and the beneficiary at the originating site.

The trend towards adoption of telemedicine improves both patient outcomes as well as providing a cost-effective health delivery system for ambulatory care providers. By optimizing your revenue cycle management to ensure proper reimbursement for your services, your medical practice can transition towards the “future of medicine” with financial confidence.

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This post was written by Nicole Ludington

Nicole Ludington is the Vice President of Client Services at Intermedix. Previously, Nicole served as a Mental Health Specialist for the U.S. Army. Nicole obtained her bachelor's degree from the University of Phoenix.

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