Telemedicine has the potential to solve many issues in our current health care system. But reimbursement for telemedicine services can be confounding. At the federal level, Medicare billing is typically limited to hospitals in rural and underserved areas. At the state level, individual states have significant influence over reimbursement as it applies to state Medicaid programs and through laws governing private payers. This all leads to a web of complexities within the billing process.

Although Eagle assigns professional billing to our partner hospitals, we can provide insight into some frequently asked questions regarding billing for telemedicine services.

Medicare Billing & Telemedicine

Does Medicare Pay for Telemedicine Services?

Telemedicine services are eligible for Medicare payment if the Originating Site is located in a county outside of a Metropolitan Statistical Area (MSA) or in a Health Professional Shortage Area (HPSA) located in a rural census tract. For services that meet these criteria, hospitals are paid a facility fee of approximately $25 for each claim. Professional fees for provision of telehealth services are the same those paid for an in-person encounter and are based on the Medicare physician fee schedule.

Medicare has shown a willingness to expand its coverage for telemedicine, but changes to the geographic limitations will require Congressional action.

What is an Originating Site?

An originating site is the location of an eligible Medicare beneficiary at the time the service is furnished via a telecommunications system. Originating sites include:

  • The offices of physicians or practitioners
  • Hospitals
  • Critical Access Hospitals (CAHs)
  • Rural Health Clinics
  • Federally Qualified Health Centers
  • Hospital-based or CAH-based Renal Dialysis Centers (including satellites)
  • Skilled Nursing Facilities (SNFs) and
  • Community Mental Health Centers (CMHCs)

Must the telemedicine provider be in the same state as the originating site?

No. The site at which the physician or other licensed practitioner delivering the telemedicine service is located at the time the service is provided is called the “Distant Site.” The Distant Site may be in a state other than the Originating Site. In those instances, the telemedicine physician or practitioner must be licensed under state law and/or meet the applicable standards required by state or local laws in both the Originating Site state and the Distant Site state.

Does my county/city qualify as an HPSA under Medicare guidelines?

The Health Resources and Services Administration (HRSA) determines HPSAs, and the Census Bureau determines MSAs. You can access HRSA’s Medicare Telehealth Payment Eligibility Analyzer

to determine a potential originating site’s eligibility for Medicare telehealth payment. More information is available online at the CMS’ Medicare Learning Network, including proper CPT codes to use when billing for specific Medicare telehealth interactions.

What type of telecommunications system is required to bill for telemedicine services?

Telemedicine services must use an interactive audio and video telecommunications system that permits real-time communication between the practitioner at the Distant Site and the patient at the Originating Site. This is known as a “synchronous telecommunication system.”  Reimbursement for “store and forward technology,” otherwise known as an “asynchronous telecommunications system,” is currently only permitted in federal telemedicine demonstration programs in Alaska and Hawaii.

All other states able to bill telemedicine services must use an interactive audio and video telecommunications system that permits real-time communication between the practitioner at the Distant Site and the beneficiary at the Originating Site.

As the Originating Site, can my facility bill a facility fee for Telemedicine?

Yes.  Medicare allows for the facility fee for Telemedicine services for the Originating Site.  The appropriate HCPCS code is Q3014 and for services performed on or after January 1, 2017. The correct Place of Service Code (POC) is 02.

When billing for telemedicine Professional Services, do we need to utilize a modifier?

Yes, for Medicare you will need to use the GT telehealth modifier.  Please note that for Federal telemedicine demonstration programs in Alaska and Hawaii, a GQ telehealth modifier should be used.

Medicaid Billing

Do we process our Medicaid claims following the same guidelines as Medicare?

Remember, Medicaid is governed by individual states.  We encourage you to do the following prior to billing for telemedicine services with Medicaid:

  • Look up the Medicaid telemedicine reimbursement policies for your state on the Center for Connected Health Policy’s website. Keep in mind:
    • Health services covered
    • Eligible providers
    • Is cross-state licensing allowed?
    • Is a pre-existing relationship with patient required?
    • Location restrictions on patient or provider
    • Applicable CPT codes
    • Type of fee reimbursed (transmission, facility or both)

Private Pay Billing

We have a large population of Private Pay Patients; do they reimburse providers in the same manner as Medicare?

Private Payer reimbursement is done a little differently. Most states require Private Payers to reimburse Telemedicine.  Some states have also enacted telemedicine parity laws that require private payers to reimburse providers the same amount for telemedicine services as the comparable in-person service.  The legal landscape for telemedicine is changing rapidly, and more states are expected to enact telemedicine parity laws. We recommend that you reach out to your private payers to inquire about their telemedicine reimbursement policies. Some sample questions to ask include:

  • Are there any restrictions on the location of the provider or patient?
  • What modifier do I need to use?
  • Are all providers eligible?
  • Any special documentation?

For more information

The U.S. currently has two national and 12 regional telehealth resource centers to provide more answers. Use this link to access the Telehealth Resource Centers website for comprehensive, up-to-date information about telemedicine, including how to bill for and market your telemedicine services. 

Note: This information was prepared as a service to the public and is not intended to grant rights or impose obligations. The information provided is only intended to be a general summary. It is not intended to take the place of either the written law or regulations. We encourage readers to review the specific statutes, regulations and other interpretive materials for a full and accurate statement of their contents. For specific assistance on how to properly bill for telemedicine services, we advise you to consult with legal counsel or a revenue cycle manager knowledgeable about billing for telemedicine services.