Telehealth Reimbursement Module

Developed by: The Center for Connected Health Policy

This module provides information on Medicare payment policies for services delivered via telehealth provided by the Centers for Medicare and Medicaid Services (CMS), state Medicaid programs and private payers.  Generally, telehealth reimbursement policies vary widely across state Medicaid plans and private payers, while CMS’ telehealth coverage is limited to strictly defined rural areas, for specific services, and when the patient is located in a specified healthcare facility by certain providers.

View each section of this module by topic, at right »

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Private Payer Law

Private payers, such as Blue Cross, Blue Shield, Aetna and Cigna (just to name a few), are not required under federal law to provide coverage for any type of telehealth service.  However, at the state level, some states have passed laws that impact telehealth reimbursement policies of private payers.  Some states mandate some sort of reimbursement, while others mandate reimbursement at the same level as in-person care under certain conditions.

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Medicaid Reimbursement

The Center for Medicare and Medicaid Services (CMS)’s  official policy on telehealth is that states may reimburse for telehealth under Medicaid as long as the service satisfies federal requirements of efficiency, economy, and quality of care.  This leaves it open for states to reimburse for telehealth as they see fit.

Therefore, each state Medicaid program has its own laws, rules, regulations and/or policies.  This means that there are 50 different Medicaid programs (plus DC and the US territories), each with their own unique program.  

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Medicare’s Telemedicine/Telehealth Payment Policies

Evolution of Medicare Telehealth Landscape

The Balanced Budget Act of 1997 (BBA) mandated Medicare coverage of telehealth care and funded telehealth demonstration projects throughout the country.  Although it was passed in 1997, payment was not required to begin until 1999.  This law set up the major policy barriers facing telehealth providers seeking reimbursement from Medicare. Restrictions included: