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Telemedicine Billing 101

An in-depth guide on billing for telemedicine

As consumer technology becomes a greater part of our everyday lives, health systems are evolving to provide fast, reliable and efficient service to all patients via their personal technology. We refer to this advancement as telemedicine.

With more than half of United States hospitals actively engaged in telemedicine and an estimated seven million new telemedicine patient users in 2018, telemedicine is on the rise. As a result of this growth, the government, via the Centers for Medicare & Medicaid Services (CMS), has advanced several payment reform packages for telemedicine reimbursement to make this platform accessible to all.

This paper was written by ARMCO’s Director of Coding Integrity, RN, CPC to provide an overview of telemedicine—and tackle the specific requirements and telemedicine reimbursement process.



What is Telemedicine?

Telemedicine is defined as the diagnosis, treatment and care of patients through a remote connection and is a subset of Telehealth. With telemedicine, the physician, advanced practitioner or psychologist is in one location—even another state—while the patient receiving care is in a separate location. According to BCC Research, the telehealth market is predicted to be valued at over $20 billion in 2019. testimonial

“Telehealth programs enable patients to receive timely care from qualified providers, rendering the health care system more effective and inclusive of all the populations we need to serve. It is a game-changer in a time of provider shortages, sicker patient populations and the ever-rising costs of care.”

—Pamela Ograbisz, DNP, FNP-BC, Director of Telehealth,

Terminologies of Telemedicine

The American Medical Association and Wellness Council of America states that almost 75 percent of all doctor, urgent care and emergency room (ER) visits “are either unnecessary or could be handled safely and effectively over the phone or video.”

To gain a better understanding of the growing practice of telemedicine, let’s review some terms commonly used in this field.

Originating site

Location of an eligible Medicare beneficiary at the time the service furnished via a telecommunications system occurs.

Distant Site

Refers to a Telehealth site where a specialist or provider either consults with the patient’s provider or sees the patient from a different location. Other common names for this term include referral site, physician site, provider site, specialty site, consulting site or hub site.

Distant site practitioners

Practitioners at the distant site who may furnish and receive payment for covered Telehealth services. These include:

  • Physicians
  • Nurse practitioners (NPs)
  • Physician assistants (PAs)
  • Nurse-midwives
  • Clinical nurse specialists (CNSs)
  • Certified registered nurse anesthetists (CRNAs)
  • Psychologists


The process of storing and forwarding transmission (not live interaction).


The interactive connections between two videos, when the information transmits at the same time for both directions.

Telemedicine Billing

According to the American Telemedicine Association (ATA), more than half of all U.S. hospitals are currently implementing a telemedicine program. While the coding and subsequent billing of telemedicine services are not overly complex, there are a few nuances and quirks involved that, if you understand, will go a long way in ensuring a successful telemedicine rollout.

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Telemedicine Billing for Medicare

Medicare pays for telemedicine services under certain circumstances. Primarily, Medicare reimburses for live telemedicine services or virtual visits delivered via synchronous means. Asynchronous (store-and-forward) telemedicine services are reimbursed in Hawaii and Alaska only at this time. Following are the requirements:

  • Synchronous communication: An interactive audio and video telecommunications system that permits real-time communication between you, at the distant site, and the beneficiary, at the originating site (except for Alaska and Hawaii wherein asynchronous is permitted).
  • Originating sites: Medicare beneficiaries are eligible if they are presented from an originating site located in:
    1. A county outside of a Metropolitan Statistical Area (MSA) or
    2. A rural Health Professional Shortage Area (HPSA) located in a rural census tract.
  • CPT and HCPCS codes used are included in the approved list of telemedicine codes from Medicare.

When all these requirements are met, Medicare reimburses 80 percent of the physician fee (the other 20 percent is paid by the patient) and will pay a facility fee to the originating site. Medicare reimburses telemedicine services at the same rate as the comparable in-person medical service, based on the current Medicare physician fee schedule. Additionally, the facility serving as the originating site can charge an additional facility fee.

  • Professional services furnished on or after January 1, 2017: To indicate the billed service was furnished as a telehealth service from a distant site, submit claims for telehealth services using Place of Service (POS) 02: Telehealth.
  • As of January 1, 2018: Distant site practitioners billing telehealth services under the Critical Access Hospital (CAH) Optional Payment Method submit institutional claims using the GT modifier. You should bill the Medicare Administrative Contractor (MAC) for covered telehealth services. Medicare reimburses you the appropriate amount under the Medicare Physician Fee Schedule (PFS) for telehealth services.


Telemedicine Billing for Medicaid

Medicaid will reimburse telemedicine services depending on the legislation passed in that state. Since Medicaid programs are state-run, they follow state-specific telemedicine regulations. You may refer to this website and filter by state to better understand the Medicaid telemedicine policy per state.


Telemedicine Billing for Commercial Insurance

Telemedicine Parity Laws are State laws requiring private payers to reimburse telemedicine services the same way they would for in-person medical services. Aetna, Blue Cross Blue Shield, Humana, Cigna and United Healthcare all cover telemedicine.

You may check the state Telemedicine Parity Laws here.

About ARMCO Healthcare

As an industry leader in Healthcare Revenue Cycle assistance, ARMCO provides its services to over 100 health systems at over 500 location sites eliminating the issues that can affect the financial health of an organization. Headquartered in Atlanta, GA, ARMCO Partners provides high-quality forensic billing, clinical abstracting, NCCI edit resolution/denial management, and ICD-10 medical coding services for your hospital, physician network, and home health/hospice service.

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