United States: Medicare Payments For Telehealth Increased 28% In 2016: What You Should Know

Telehealth providers can celebrate another successful year of growth, as CMS reported a 28% increase over total 2016 payments for telehealth services under the Medicare program. Providers continue to successfully integrate telehealth services into their traditional health care delivery approaches, and are realizing payment opportunities both within the Medicare FFS program and in other sources of revenue. Our thanks to POLITICO Pro Morning eHealth Reporter, David Pittman, who first reported on the story and shared the claims data.

2016 Medicare Telehealth Claims Data

Let's review the numbers. In CY 2016, Medicare paid a total of $28,748,210 for telehealth services, spread across a total of 496,396 claims. This includes payments to distant site providers and originating site payments. Compare this amount to last year, in which Medicare paid a total of $22,449,968 for telehealth services, spread across a total of 372,518 claims. (The figures are slightly different than reported in prior years, as CMS changed its data collection and calculation methodology this year.)

The result: 2016 saw a 33% increase in the number of Medicare telehealth claims submitted and a 28% increase in total payments. This uptick in total payments is not attributable to fee schedule rate increases, but rather to more providers using telehealth services with their traditional Medicare FFS beneficiaries.

More Originating Site Claims Filed Than Ever Before

Perhaps the most interesting element in the new data is the significant increase in originating site claims (HCPCS Code Q3014).. Before 2015, approximately half of all distant site claims did not have a corresponding originating site claim. This gap has closed in the last two years, and in 2016, 66% of all distant site claims had a corresponding originating site claim. The remaining gap could be due to providers not bothering to bill for the $25 originating site facility fee, or it could be that some claims were billed when the patient was located at home (a different site of service for which a facility would not bill). The federal Office of Inspector General at the Department of Health & Human Services has announced a new audit project to review Medicare payments for telehealth services and understand the reason(s) for this gap.


Despite the increase, Medicare's $28.7 million payments in 2016 remains a small portion of the $600+ billion overall Medicare program budget. Remember: in 2001, the Congressional Budget Office estimated it would cost the Medicare program $150 million to cover telehealth services for the first five years ($30 million a year). Fifteen years later, total payments (2011-2016) still have not cracked that $150 million forecast and annual spend has not hit $30 million.

Medicare Coverage of Telehealth Services is Limited

Coverage of telehealth services under Medicare remains limited, with the restrictions established via statute under the Social Security Act. Any notable expansion of telehealth coverage under Medicare would require legislation by Congress. There are several bills pending in Congress to remove these limitations, but until such time, there are five main conditions for coverage for telehealth services under Medicare.

  1. The beneficiary is located in a qualifying rural area (providers can check if the originating site is in a qualifying rural area by using the Medicare Telehealth Payment Eligibility Analyzer);
  2. The beneficiary is located at one of eight qualifying originating sites (i.e., the offices of physicians or practitioners; Hospitals; Critical Access Hospitals; Rural Health Clinics; Federally Qualified Health Centers; Hospital-based or CAH-based Renal Dialysis Centers (including satellites); Skilled Nursing Facilities; and Community Mental Health Centers);
  3. The services are provided by one of ten distant site practitioners eligible to furnish and receive Medicare payment for telehealth services (i.e., physicians; nurse practitioners;"physician assistants;"nurse-midwives;" clinical nurse specialists;" certified registered nurse anesthetists; clinical psychologists; clinical social workers; registered dietitians; and nutrition professionals);
  4. The beneficiary and distant site practitioner communicate via an interactive audio and video telecommunications system that permits real-time communication between them (store and forward is covered in Alaska and Hawaii under demonstration programs); and
  5. The CPT/HCPCS (Current Procedural Terminology/Healthcare Common Procedure Coding System) code for the service itself is named on the CY 2017 (or current year) list of covered Medicare telehealth services.

In order to bill Medicare for telehealth services, the distant site practitioner must fully comply with each of these requirements. If the service does not meet each of these above requirements, the Medicare program will not pay for the service. If, however, the conditions of coverage are met, the use of an interactive telecommunications system substitutes for an in-person encounter (i.e., it satisfies the "face-to-face" element of a service).

How to Request Additional Medicare Telehealth Services

Providers and other interested parties need not wait on federal legislation to pass. Anyone may send CMS a request to add services (HCPCS codes) to the list of covered Medicare telehealth services. This can include medical specialty societies, individual physicians or practitioners, hospitals, state and federal agencies, telehealth companies, vendors, and even patients. Requests may be submitted at any time on an ongoing basis. The requests will be consolidated and considered during the CMS rulemaking cycle that establishes the physician fee schedule rates.

Each request should address the following:

  • Name(s), address(es) and contact information of the requestor.
  • The HCPCS code(s) that describes the service(s) proposed for addition or deletion to the list of Medicare telehealth services. If the requestor does not know the applicable HCPCS code, the request should include a description of services furnished during the telehealth session.
  • A description of the type(s) of medical professional(s) providing the telehealth service at the distant site.
  • A detailed discussion of the reasons the proposed service should be added to the definition of Medicare telehealth service.
  • An explanation as to why the requested service cannot be billed under the current scope of telehealth services, for example, the reason why the HCPCS codes currently on the list of Medicare telehealth services would not be appropriate for billing the service requested.
  • Evidence that supports adding the service(s) to the list on either a category 1 or category 2 basis as explained in the section labeled "CMS Criteria for Submitted Requests."

Email your request to Telehealth_Review_Process@cms.hhs.gov and title it "Telehealth Review Process." Alternatively, you can mail the request to: Division of Practitioner Services, Mail Stop: C4-03-06, Centers for Medicare and Medicaid Services, 7500 Security Boulevard Baltimore, Maryland 21244-1850. Attention: Telehealth Review Process.

Continued expansions in reimbursement mean providers should make enhancements to telehealth programs now, both for the immediate cost savings and growing opportunities for revenue generation, to say nothing of patient quality and satisfaction.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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