Medicare Payments for Telehealth Increased 25% in 2015: What You Need to Know

03 March 2016 Health Care Law Today Blog

More good news on the telehealth reimbursement front: CMS reported its total 2015 payments for telehealth services under the Medicare program and it was a 25% increase over last year. This reflects how providers are successfully integrating telehealth services into their traditional health care delivery approaches, and are better realizing payment opportunities both within the Medicare FFS program and in other sources of revenue. We have written and advocated extensively on ways providers can (and should) look beyond solely Medicare to drive the financial growth of their telehealth offerings. It is encouraging to see more providers taking the time to understand the reimbursement opportunities and submit covered claims for payment.

Let’s break down the numbers. In CY 2015, Medicare paid a total of $17,601,996 for telehealth services, spread across a total of 271,877 claims. This includes payments to distant site providers and originating site payments. Compare this to last year, in which Medicare paid a total of $13,934,430 for telehealth services, spread across a total of 214,346 claims. The result: 2015 saw a 27% increase in the number of Medicare FFS telehealth services claims submitted and a 25% increase in total payments. And this uptick in total payments is not attributable to reimbursement increases, but rather to more providers using telehealth services with their traditional Medicare FFS beneficiaries. This is particularly true with claims for professional services by distant site providers, which has seen the largest uptick in claims volume.

This is an early report and CMS’ Office of the Actuary, National Health Statistics Group has not yet posted its official National Health Expenditures Tables. Nor has the 2016 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds been published. Those are expected to be released later this year.

Despite the increase, Medicare’s $17.6 million payments in 2015 remains an infinitesimal slice of the $600 billion overall Medicare program budget. And yet, fears that Medicare FFS coverage of telehealth services would be a budget buster continue to prove unjustified. Remember: in 2001, the Congressional Budget Office estimated it would cost the Medicare program $150 million ($30 million a year) to cover telehealth services from 2001 through 2005. As it turns out, the total payments during those first 5 years was just $3,103,912 and the total payments to date (2011-2015) has been $75,460,785.

Medicare Coverage of Telehealth Services is Limited

Medicare’s coverage of telehealth services is limited and subject to conditions, including:

  • The patient (originating site) must be located in a Health Care Professional Shortage Area or a county outside a Metropolitan Statistical Area;
  • The originating site must be one of eight qualifying medical facilities, and may not be the patient’s home;
  • The modality must be real time, face-to-face, interactive video consultation services where the patient is present (store and forward is covered in Alaska and Hawaii);
  • The program only covers a limited set of services, designated by HCPCS code.

But Upcoming Federal Legislation Would Expand Coverage

Change is on the way with a number of federal legislative efforts to strike down the Medicare restrictions on telehealth services. The most recent is the CONNECT for Health Act, introduced earlier this month by a bipartisan group of Senators led by Sen. Brian Schatz (D-Hawaii) and Sen. Roger Wicker (R-Miss). The CONNECT for Health Act would implement a phased in approach to remove many of the telehealth coverage restrictions under Medicare, particularly as providers transition to the CMS’ new Merit-Based Incentive Payment System.

How to Request Additional Medicare Telehealth Services

Providers and other interested parties need not wait on federal legislation to pass. Anyone from the public or private sectors may send CMS a request to add services to the list of 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 upcoming 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 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. Reimbursement is among the five telemedicine trends driving health care transformation in 2016 and beyond.

For more information on telemedicine, telehealth, and virtual care innovations, including the team, publications, and other materials, visit Foley’s Telemedicine Practice.

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