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Reimbursement for Telemedicine

Today, more and more healthcare practices are implementing telemedicine programs. One of the main reasons is that these programs offer the opportunity to increase profitability. Providers that offer video visits as a replacement for some in-person visits are able to see more patients each day, turn unbillable follow up calls into revenue generating encounters, and minimize the problem of no-shows and last minute cancellations.

Of course, this will only impact the bottom line if you get reimbursed for these telemedicine encounters. That’s why it is essential to familiarize yourself with the complex set of laws, policies, and regulations that determine how payment for telemedicine is handled.

Telemedicine Reimbursement by Private Payers

The good news is that the popularity of telemedicine is driving legislators and insurance executives toward more progressive policies regarding telemedicine. However, for now, there is a patchwork of coverage.

State Parity Laws

Twenty-six states have laws that require private insurers to reimburse healthcare providers for services delivered through telemedicine. Ten more states also have pending or proposed laws to do the same. These laws generally prohibit private payers from taking into account the patient’s location when making a reimbursement decision. This allows patients to conduct video visits from their home or office.

Eligible Providers and Technologies

All states with parity laws include real-time video conferencing as an acceptable form of telemedicine. Some also cover the store-and-forward approach. For the most part, any provider that can bill for an in-person encounter is eligible to be reimbursed for a video -visit. But keep in mind that each state medical board is tasked with determining which professionals are covered under state parity laws.

Reimbursement Amounts

States also set the reimbursement amounts. Many require that private payers reimburse the same amount for remote visits that they offer for in-person ones. Some states leave that decision up to the insurer. State laws aside, many private payers realize the efficiency of telemedicine and voluntarily reimburse at the same rate as in-person encounters even if the state does not require it.

The Exceptions

Many states with parity laws have made exceptions for certain types of insurance plans. Worker’s compensation plans and small group plans may be eligible to opt out of coverage for telemedicine.

Medicare Telehealth Reimbursement

Medicare takes two different approaches to telemedicine reimbursement. The standard approach covers most patients and is a geographically limited hub-and-spoke model. There is also a new Chronic Care Management program that allows reimbursement for some video-visits.

Geographically Limited Hub-and-Spoke

Telemedicine reimbursement under Medicare was targeted toward patients who live in rural or remote areas with limited access to specialists. For this reason, in order to be eligible for reimbursement, patients must live in a Health Professional Shortage Area (HPSA) that is outside of a metropolitan area.

Medicare also requires that patients be present at what’s called an “Originating Site.” Originating sites include places like; doctor’s offices, hospitals, skilled nursing facilities, rural health clinics, and community mental health centers.  If a patient is not at an approved Originating site, video visits are not eligible for reimbursement. This means that remote visits from the patient’s home are not covered.

Chronic Care Management (CCM) Program

Medicare recently introduced the Chronic Care Management Program. This program compensates providers that coordinate the care of Medicare patients who have two or more chronic conditions.  It is open to patients no matter where they live. Providers are reimbursed $42 per month per patient for coordinating their care. This potential revenue is in addition to other services, like office visits that the provider bills for. In order to be eligible for this reimbursement, the provider must document at least 20 minutes per month in non -face-to-face care of patients.

Video visits are an ideal way to provide and document the service at the same time. Under the Chronic Care Management program, the patient does not need to be at an Originating site, making this an ideal service to provide while the patient is at home.


All state Medicaid programs cover telemedicine to some degree, but each of them has a different set of rules and requirements. Some have originating site requirements like Medicare, while others do away with this limitation in favor of letting patients use telehealth solutions at home. To find out how telemedicine is reimbursed by Medicaid in your state, check out this comprehensive scan of the 50 states and District of Columbia by the Center for Concerned Health Policy.
Right now reimbursement for telemedicine is unfortunately complicated. There are telemedicine technologies that help you sort through it and schedule video visits for eligible patients. Change is coming, however. All signs point to a future of better telemedicine: how patients are treated and how providers are paid.

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