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Telehealth Services: What You Need to Know

Monday, July 9, 2018

The HHS’ Office of the Inspector General (OIG) recently conducted a review of claims submitted for telehealth services provided to Medicare beneficiaries between 2014 and 2015. A report on their findings, issued in April 2018, found several deficiencies in the submission of claims for telehealth services, with the most common being a claim for a distant site service not having an originating site claim. Other claim submission errors included:

  • Beneficiaries received services at non-rural originating sites
  • Ineligible institutional providers
  • Services provided to beneficiaries at unauthorized originating sites
  • Services provided by an unallowable means of communication
  • Submitted for non-covered services
  • Services provided by a physician located outside of the United States

Claims that did not meet the telehealth criteria for payment were paid erroneously by Medicare contractors as a result of claim edits not being in place to flag the erroneous claims.

So what are the rules?

Reimbursement for telehealth services includes the professional fee, paid to the practitioner for performing the services at a distant site, and an originating-site fee, paid to the facility where the beneficiary of the telehealth service receives the service.


Is defined as a site at which a Medicare beneficiary is located at the time health care services are delivered to them by means of a telecommunications system.

An originating site must be located in either:

  • A county outside of a Metropolitan Statistical Area (MSA) or
  • A rural Health Professional Shortage Area (HPSA) located in a rural census tract
  • Entities that participate in a Federal telemedicine demonstration project approved by (or receiving funding from) the Secretary of the U.S. Department of Health & Human Services (HHS) as of December 31,2000 qualify as originating sites regardless of geographic location.
  • Originating sites authorized by law include:
    • Offices of physicians or practitioners
    • Hospitals
    • Critical Access Hospitals (CAH)
    • Rural Health Clinics
    • Federally Qualified Health Centers (FQHC)
    • Hospital Based or CAH-based Renal Dialysis Centers including satellites
      • Independent Renal Dialysis Facilities are not originating sites
    • Skilled Nursing Facilities (SNF)
    • Community Mental Health Centers (CMHC)

Geographic eligibility of an originating site is established based on the status of the area as of December 31st of the prior year.

The originating site is paid an originating site facility fee for telehealth services using HCPCS code Q3014 and is a separately billable Part B service. As a condition of payment, the patient must be present and participating in the telehealth visit.


Is defined as a site at which a telehealth provider is located while delivering health care services by means of telehealth to a beneficiary at an originating site.

Practitioners at the distant site who furnish and receive payment for covered telehealth services, subject to State law, include:

  • Physicians
  • Nurse practitioners (NP)
  • Physician assistants (PA)
  • Nurse midwives
  • Clinical nurse specialists (CNS)
  • Certified registered nurse anesthetists (CRNA)
  • Clinical psychologists (CP) and clinical social workers (CSW)
  • Registered dieticians or nutrition professionals

Claims for telehealth services should be submitted using the appropriate CPT or HCPCS code for the professional service. To indicate that the billed service was furnished as a telehealth service from a distant site, submit claims using Place of Service (POS) 02: Telehealth: The location where health services and health related services are provided or received, through telehealth telecommunication technology.

Distant site practitioners located in a CAH that have reassigned their billing rights to the CAH will bill the services under the CAH Optional Payment Method (Method 2). These institutional claims must be submitted using the GT modifier. The payment amount is 80 percent of the Medicare PFS for telehealth services

For Federal telemedicine demonstration programs in Alaska or Hawaii, submit claims using the appropriate CPT or HCPCS code for the professional service along with the telehealth modifier GQ. By coding and billing the GQ modifier, the practitioner is certifying that the asynchronous medical file was collected and transmitted to the distant site from a Federal telemedicine demonstration project conducted in Alaska or Hawaii.


As a condition of payment for telemedicine services, an interactive audio and video telecommunications system that permits real-time communication between the distant site, and the beneficiary at the originating site, must be in place. Telephone, fax, and email are not valid telecommunication systems.

Asynchronous “store and forward” technology, the transmission of medical information the physician or practitioner at the distant site reviews at a later time, is permitted only in Federal telemedicine demonstration programs in Alaska or Hawaii.


The list of allowable Medicare telehealth services is listed on the CMS website. Changes to the list are made as part of the annual physician fee schedule rulemaking process.


Many states are now reimbursing telehealth services through their state Medicaid program. Private insurers in many states are also reimbursing for telehealth services. As of the spring of 2018, 49 states and the District of Columbia provide Medicaid reimbursement for telehealth services.

For example, New York State requires private insurers and the Medicaid program to provide reimbursement for services delivered via telehealth if those services would have been covered if delivered in person. Pennsylvania provides reimbursement under the state’s Medicaid program for specialty consultations such as high risk obstetrical cases and telepsychiatry services.

There are differences between the New York and the Federal program:

  • Store-and-forward telehealth services, which under Federal law is limited to Federal demonstration projects in Alaska and Hawaii, is included in the NY Medicaid program for specialty areas such as dermatology and ophthalmology. Private insurers are not mandated to reimburse for store-and-forward technology. As with Federal regulations, telephone, fax, and email is excluded from telehealth services.
  • Remote Patient Monitoring (RPM), allows for the reimbursement of remote patient monitoring services (distant site) to assist in the effective monitoring and management of patients with unstable or uncontrolled medical conditions whose medical needs can be appropriately and cost-effectively met at the patient’s home (originating site). Congestive heart failure and diabetes are examples of unstable or uncontrolled medical conditions. RPM is to be discontinued when the patient’s condition has been stabilized.

How can Fust Charles Chambers Help?

Our experts will review your current telehealth billing processes to determine if your organization is accurately billing to ensure maximization of revenue opportunities and, is in compliance with program requirements for Medicare, Medicaid and private insurers.


For further information, please contact:

Richard T. (Terry) Lang, FHFMA, CPA

Senior Manager