How to Start Doing Telemedicine Now (In the COVID-19 Crisis)

Neal Sikka, MD


March 25, 2020

Medicare Advantage Reimbursement

Medicare Advantage plans offer somewhat more robust coverage than traditional Medicare. These managed care plans, which now cover about one third of Medicare beneficiaries, can do this because they are run by commercial insurers contracted with Medicare.

Medicare Advantage plans embraced telemedicine quite recently. In 2018, 88% of Medicare Advantage plans offered telehealth supplemental benefits, a 77% increase over 2017, according to a recent analysis.

Even now, Medicare rules restrict Medicare Advantage plans' spending on telemedicine to a relatively small part of their budgets. But starting in plan year 2020, these plans will be able to use any part of their budget for telemedicine. With this change, Medicare Advantage plans will see telemedicine becoming a very common way for doctors to see patients.

Medicaid Reimbursement May Be Promising

State Medicaid programs are relying a great deal on telemedicine to reduce expenditures. In addition, Medicaid is often a better payer for telemedicine than Medicare or commercial insurance. This is because most Medicaid programs pay the same rates as face-to-face services.

Medicaid programs in virtually all states and the District of Columbia cover telemedicine, though some programs limit coverage to real-time audio-video. Only 11 Medicaid programs reimburse for asynchronous telemedicine, and 20 Medicaid programs cover remote patient monitoring, according to the Center for Connected Health Policy (CCHP).

Telemedicine delivered to a patient who is at home tends not to be reimbursed by Medicaid programs. Of the eight Medicaid programs reviewed in one study, none reimbursed for at-home service. Medicaid programs may also bar out-of-state medical licensing, require a preexisting relationship with the patient, and limit coverage to specific diagnostic codes.

Many Medicaid programs exclude some providers for low-income patients. Only 10 Medicaid programs cover telemedicine for both Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs), whereas two programs cover just RHC and one covers just FQHC, according to the CCHP.

Reimbursement From Commercial Payers

Commercial reimbursement for telemedicine is very common, thanks to state laws that require private payers to cover at least some aspects of telemedicine. As of mid-2019, 40 states and Washington, DC, had so-called telemedicine parity laws.

"Parity" means "equality," but many of these states do not require commercial payments to be equal to those for face-to-face visits. Also, requirements are limited to real-time audio-video visits in many states and not to other modalities, and there can be other loopholes.

For example, some commercial insurers limit coverage to providers they have approved. This has been the stated policy of Anthem and Cigna, barring state laws to the contrary. In addition, Texas and Colorado have laws that bar health plans from limiting telehealth coverage to a specific vendor or technology.

Meanwhile, the American Medical Association (AMA) has been creating new Current Procedural Terminology (CPT) codes so that doctors and others can charge payers for more telehealth services—that is, once payers have agreed to pay for them. For example, in 2018, the AMA issued new CPT codes to carry out remote patient monitoring.


The technology for telemedicine is very simple: a secure telemedicine platform that creates the telemedicine connection. Many EHR systems provide a simple telemedicine platform. Independent vendors provide platforms that are usually more robust, but they may not integrate with your medical records.

To be secure, telemedicine data need to be encrypted, and it is a good idea to obtain a BAA from the vendor to comply with HIPAA. Patient verification software is not necessary if telemedicine is limited to existing patients using the practice's secure patient portal.

Regarding reimbursement, many Medicare Advantage plans, Medicaid programs, and commercial insurers provide extensive coverage for telemedicine. Traditional Medicare generally restricts use of telemedicine, but some of these restrictions have been loosened.

This article has been updated and adapted from Medscape's Physician Business Academy course Telemedicine: Can It Help Your Practice? Making Video Visits Successful for You and Your Patients

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