Reimbursement for Telemedicine Under Medicare

The Centers for Medicare & Medicaid Services (CMS) acknowledges the value of health care providers delivering direct patient care using telecommunications technology (aka telemedicine) when a traditional face-to-face encounter is not feasible or practical. Under certain circumstances, Medicare pays for some Part B services performed by a physician or provider via telemedicine. This article will outline the major requirements for physician or practitioner reimbursement for telemedicine services under the Medicare Fee-For-Service Program for the year 2014.

Note: While there is no universal consensus on the definition of telehealth and telemedicine, many stakeholders consider telemedicine to be the provision of direct patient care via telecommunications technology and a subset of telehealth.

Patients at Originating Sites

The originating site is defined as the location of the Medicare beneficiary, or patient, at the time the telemedicine service is provided. Medicare recognizes telemedicine services only when the originating site is located in:

  • A rural Health Professional Shortage Area outside of a Metropolitan Statistical Area (MSA) or in a rural census tract, as designated by the Office of Rural Health Policy of the Health Resources and Services Administration; or

  • A county outside of a MSA

Furthermore, the Medicare beneficiary must receive the telemedicine services while located in one of the following types of health care settings:

  • Offices of physicians or practitioners
  • Hospitals
  • Critical Access Hospitals
  • Federally Qualified Health Centers
  • Rural health clinics
  • Community mental health centers
  • Skilled nursing facilities
  • Hospital-based renal dialysis centers (including satellites), but not including independent renal dialysis facilities

Note that this requirement excludes telemedicine services provided for patients when they are at home.

Health Care Providers at Distant Sites

In order to be covered by Medicare, telemedicine services must be provided by physicians, nurse practitioners, physician assistants, nurse-midwives, clinical nurse specialists, registered dietitians, or nutrition professionals. Clinical psychologists and clinical social workers can also bill for some telemedicine services, but not for psychiatric diagnostic interview examinations with medical services or medical evaluation and management services. The location of the health care provider is considered the distant site.

Modes of Telemedicine

The three major operational modes of telemedicine are remote monitoring, store-and-forward, and interactive real-time telemedicine. Medicare does not pay for remote monitoring, such as asynchronous analysis of blood pressure and blood glucose readings. Asynchronous “store and forward” is covered only for Federal telemedicine demonstration programs in Hawaii or Alaska.

Some services do not require the patient to be present during their implementation (e.g. radiologist interpreting an x-ray).

These remote services are not covered by CMS, and they are considered and covered the same as services delivered on-site.

Provided that other requirements are met, Medicare does reimburse for interactive video-and audio-based telemedicine involving two-way, real-time interactive communication between the beneficiary (at the originating site) and provider (at the distant site). The patient must be present at the time the service is delivered so that the encounter mimics a traditional face-to-face visit.

Covered Services

The following is a non-exhaustive list of some of the services that can be reimbursed when delivered via telemedicine:

  • Consultations in emergency department
  • Initial inpatient consultations
  • Office or other outpatient visits
  • Individual psychotherapy
  • Pharmacologic management
  • Behavioral counseling related to obesity, cardiovascular risk, smoking cessation, alcohol or substance abuse, and high-risk sexual behavior.

In summary, Medicare provides reimbursement for telemedicine services under a specific set of circumstances. The requirements address the location of the patient (originating site) and health care provider (distant site); qualification of the health care provider; mode of telecommunication; and specific patient care services.


Centers for Medicare & Medicaid Services. Telehealth Services. Accessed on July 7, 2014.

Centers for Medicare & Medicaid Services. Telehealth. Accessed on July 8, 2014.

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