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Understanding the state of Medicare telehealth coverage

Understanding the state of Medicare telehealth coverage

The COVID-19 pandemic brought about many popular changes to how Medicare covers telehealth. The Centers for Medicare and Medicaid Services (CMS) used special authority it received under the COVID-19 Public Health Emergency (PHE) declaration to waive many of the restrictive Medicare telehealth coverage requirements. CMS lost the authority to provide this flexibility when the PHE expired. However, Congress has since passed legislation to extend some of the most popular coverage flexibilities.

These extensions, plus other coverage changes CMS has made via the annual Medicare Physician Fee Schedule (PFS) rulemaking, has led us to a much different Medicare telehealth coverage environment from the pre-pandemic period. Some of these changes are permanent, while others are temporary. It’s easy to confuse which changes are permanent, and which must be extended again by Congress.

Medicare’s outdated coverage framework

Section 1834 (m) of the Social Security Act (SSA) dictates how Medicare covers telehealth. Under this statute, Medicare only covers telehealth if the patient is located in a rural area and requires the patient to travel to an “originating site” such as a physician’s office or rural health clinic (RHC) to connect to the telehealth provider located at a “distant site.” This framework is completely antiquated compared to how patients now expect to receive telehealth from the convenience of their home, office or other place of their choosing.

The geographic and originating site/distant site policies were waived during the PHE. It allowed patients to connect to any telehealth provider from essentially anywhere.

Congress has passed multiple extensions of these flexibilities since the PHE ended. The most recent extension was passed as part of the year-end legislative package in December. In this legislation, Congress extended these flexibilities through March of 2025. If Congress fails to extend these policies again, Medicare telehealth coverage would then revert to the pre-pandemic regulatory framework as articulated in Section 1834 (m), including the geographic and originating site/distant site requirements.

Medicare is the only major payer that includes such restrictive telehealth coverage policies. However, CMS does not have the authority to change these requirements. Only Congress can change Section 1834 (m). Congress is widely expected to pass at least another temporary extension while it continues to consider a permanent policy change.

Telehealth coding updates

CMS also plays an important role in setting Medicare coverage policies. While Congress determines how Medicare covers telehealth, CMS decides which telehealth services are covered. The list of covered telehealth services is updated every year in the Medicare PFS rule. These coverage determinations are permanent unless changed by CMS in future PFS rules.

Sometimes, CMS does not align its coverage policies with those of other payers. This is true for new telehealth codes created by the AMA for 2025.

The AMA added new E&M telemedicine codes in 2025 (CPT Codes 98000 – 98015). The new codes are divided by technology type (audio-video vs. audio only) and patient type (new vs. established). The codes are for synchronous, real-time interactive encounters. They are stratified for medical decision-making or time, just like office visit codes. It’s not clear if commercial health plans will cover these codes. Allergists should check with each health plan before billing the new codes. Notably, CMS will not cover these new codes in 2025. Therefore, allergists should continue to use CPT codes 99202-99215 when billing telehealth services to Medicare.

Another important change to be aware of is that CPT code 98016 replaces the previous virtual check-in code G2012. 98016 is for established patients only and must be initiated by the patient. It’s a single 5- to 10-minute technology-based medical discussion that is not related to an E/M service in the prior seven days or one that leads to an E/M service in the next 24 hours. The non-facility payment for this code is $15.85 (not including geographic adjustments). Medicare covers this code, as do many commercial carriers.

Place of service code matters

Medicare telehealth payments vary based on the place of service (POS) code on the claim. Medicare pays two different rates for telehealth services: the facility rate and the non-facility rate. The facility rate is lower because the overhead component of that service is reimbursed separately. The non-facility rate is higher because it includes an overhead component.

Currently, telehealth services billed to Medicare using POS Code 10 (telehealth provided in patient’s home) is typically reimbursed at the higher non-facility rate. Telehealth services billed to Medicare using POS code 02 (telehealth provided other than in a patient’s home) is typically paid at the facility rate.

Audio-only telehealth

In addition to those updates, the 2025 PFS permanently allows clinicians to bill for telehealth services that are provided with only an audio (and no visual) connection if the physician can use an audio-video telecommunications system, but the patient is unable or does not consent to the use of video. This policy applies to any covered Medicare telehealth service. Previously, Medicare restricted audio-only telehealth coverage to certain services.

As part of this change, audio-only CPT codes 99441-99443 are no longer available.

Provider enrollment

For 2025, CMS will continue to permit distant-site practitioners to use their currently enrolled practice locations instead of their home addresses when providing services from their home. This comes in response to privacy concerns from telehealth providers about having to enroll their home as a practice location.

Outlook on permanent changes

Annual updates to Medicare coverage policies made via the PFS are difficult to predict. However, we know Congress has a deadline to extend the geographic and originating site/distant site flexibilities beyond March of this year. There is strong bipartisan interest in Congress to permanently remove these requirements, despite the fact that doing so is projected to increase Medicare spending. Telehealth increases access to health care, which therefore increases how much Medicare must spend to cover these services. Identifying a way to offset this cost is the main barrier to a permanent legislative policy change.

As Congress does not want to be blamed for allowing these Medicare telehealth coverage flexibilities to expire, they are expected to continue passing short-term extensions unless and until it can pass a permanent solution. We will continue to monitor these issues and report on further developments.

The Advocacy Council – ADVOCATING FOR ALLERGISTS AND THEIR PATIENTS.

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