Ace Medicare Telehealth Reimbursement Basics—Part I

Posted on 5 Jun, 2018 |comments_icon 0|By Elizabeth

Medicare pays telehealth services under the Medicare fee-for-service program, with a larger payment made to the consulting physician or practitioner (at the distant site) than the payment made to the facility at the site where the patient is located.

According to a MedPAC report, from 2014-2016 the use of telehealth grew by 79%, but this increase still only makes up 0.3 percent of all Medicare Part B beneficiaries.

Note: Medicare beneficiaries using telehealth tend to be young, disabled, eligible for both Medicare and Medicaid, and reside in rural areas.

The amount of reimbursement for telehealth services in the fee-for-service program has been relatively small. Medicare spent approximately $14.4 million on services delivered via telehealth in 2015, or less than 0.01 percent of their total spending on healthcare services.

CMS mandates that Medicare Advantage (MA) plans provide minimal Medicare-covered telehealth services. It is permissible for MA plans to offer telehealth coverage that goes beyond the defined benefit package Medicare mandates and provide additional coverage as supplemental benefits. CMS identified 72 different types of plans in three healthcare delivery systems (Kaiser, Spectrum and Ministry) that specifically mention coverage of telehealth services and/or areas they cover beyond Medicare’s current telehealth definition.

Key: As of 2016, two of the largest insurers, Anthem and Humana, are offering remote access technology services to MA enrollees across multiple states.

Current Medicare payment regulations limit the use of telehealth services to rural Health Professional Shortage Areas (HPSAs) and require the patient to be located in outpatient offices/clinics, hospitals, FQHCs, or SNFs.

Plus: CMS is currently testing the feasibility of offering more expansive coverage for telehealth via CMS’s Innovation’s Next Generation Accountable Care Organization (ACO) Demonstration. The Next Generation ACO telehealth waiver eliminates both of these preconditions and allows Next Generation ACO beneficiaries to receive telehealth services in their home regardless of whether they are in a rural area.

Note: The Medicare Access and CHIP Reauthorization Act (MACRA) legislation enacted in 2015 includes several telehealth provisions. One of the provisions identifies “the use of remote monitoring or telehealth” as an example of an activity that would fall under a care coordination subcategory of the Clinical Practice Improvement Activities performance category under the Merit-Based Incentive Payment System (MIPS). MIPS is a Medicare program used for assessing physicians’ and other practitioners’ performance and adjusting payments.

Bottom line: The MACRA provision offers a possible “reward” to your physicians and other practitioners who coordinate care using telehealth modalities, even when direct reimbursement for such activity may not be available. Another provision gives CMS the authority to reimburse providers participating in Advanced Alternative Payment Models (APMs) for telehealth services. Under MACRA, eligible providers participating in a qualifying APM will have the capacity to provide a broad array of services at a distance using many different telehealth modalities irrespective of the physical location of the patient or the provider.

Caution: Keep in mind, the Medicare fee-for-service program only reimburses for telehealth, which it requires to be delivered by a video-link and when the patient is at a certified healthcare facility in a Health Professional Shortage Area (HPSA).

2018 Medicare Physician Fee Schedule

Telemedicine was addressed in the final rule of the 2018 Medicare Physician Fee Schedule (MPFS). Not only were multiple new codes added, but CMS stated the following in a press release, which indicates their willingness to pay more for telemedicine services:

“To strengthen access to care, especially for those living in rural areas, CMS is transforming access to Medicare telehealth services by paying for more services and making it easier for providers to bill for these services. Improving access to telehealth services reflects CMS’s work to modernize Medicare payments to promote patient-centered innovations.”

In addition, CMS stated the following in the 2018 MPFS Final Rule (82 FR 53014):

  • CMS is allowing CPT® code 99091 to be billed once per patient during the same service period as chronic care management (CCM) (CPT® codes 99487, 99489, and 99490), Transitional Care Management (TCM) (CPT® codes 99495 and 99496), and behavioral health integration (BHI) services (CPT® codes 99492, 99493, 99494, and 99484).
  • CMS is requiring that the practitioner obtain advance beneficiary consent for the service provided and then document this in the patient’s medical record.
  • For new patients or patients not seen by the billing practitioner within one year prior to billing CPT® code 99091, CMS requires initiation of the service during a face-to-face visit with the billing practitioner, such as an Annual Wellness Visit or Initial Preventive Physical Exam, or other face-to-face visit with the billing practitioner.

Medicare will pay both a facility fee to the originating site and a separate payment to the distant site practitioner who provides the service only if the telemedicine service meets all of the following stipulations:

  • A physician or other authorized practitioner must provide the telemedicine service.
  • The patient who receives the telemedicine service must be enrolled under Medicare Part B and receive the service at an accepted telemedicine originating site.
  • The qualified physician must employ interactive, real-time, two-way telecommunications equipment that includes both audio and video when he provides the telemedicine service.
  • The service must appear on Medicare’s list of approved telemedicine services.

Learn More

Get you up to speed on telehealth billing, coding, denials, and everything between with The Telemedicine & Telehealth Handbook for Medical Practices.



Elizabeth works on an array of projects at TCI, researching and writing about modern reimbursement challenges. Since joining TCI in 2017, she has also covered the nuts and bolts of cybersecurity, compliance with federal laws, and how to tap into the advantages of telehealth services.

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