Medicare and Telemedicine: Navigating Reimbursement Challenges

Introduction

The rapid rise of telemedicine has transformed U.S. healthcare, creating new billing challenges for providers. Telehealth visits among Medicare beneficiaries surged from 5 million to over 53 million during the pandemic, a 766% increase. To maximize reimbursement and remain compliant, healthcare organizations must understand how American Medical Association (AMA) CPT codes differ from Centers for Medicare & Medicaid Services (CMS) billing guidelines.

Understanding Medicare and Telemedicine billing requirements is now essential for financial sustainability.

Comparing CPT Codes and CMS Rules

Much of the confusion surrounding telehealth billing arises from misunderstandings about the relationship between CPT codes and CMS rules. CPT codes describe medical procedures and their complexity, but CMS guidelines determine whether those services qualify for reimbursement, under what conditions, and at what rate.

Before the pandemic, telehealth accounted for just 0.1% of evaluation and management (E/M) visits. By 2025, this share has stabilized between 5.7% and 7%, making expertise in both CPT coding and CMS requirements essential for accurate billing and compliance.

Telemedicine’s Evolving Role

Telehealth remains a core part of virtual care, with about 15% of Medicare beneficiaries using it by late 2025. However, access gaps persist: roughly 26% of older adults lack internet-enabled devices for video visits. While audio-only visits continue to play a role particularly in mental health Medicare policy changes have reduced reimbursement for them, impacting overall audio-only use and reimbursement eligibility under CMS rules.

Key Differences in Telemedicine Coding and Billing

1. Service Description vs. Coverage Policy

CPT codes describe the telemedicine service provided, but CMS determines if and when it qualifies for payment.

2. Geographic and Originating Site Rules

While CPT coding doesn’t distinguish rural from urban locations, CMS historically has. About 22% of rural Americans lack broadband, adding complexity to Medicare and Telemedicine billing compliance.

3. Modifiers and Documentation

CMS no longer requires modifier 95 for telehealth claims, but correct Place of Service (POS) codes such as 02 or 10 must be used. Detailed documentation remains critical, including patient consent, the telehealth platform, and clinical justification. New 2025 rules also impose additional requirements for identity verification and in-person visit history for certain mental health telehealth services. Proper coding and thorough documentation are essential to meet CMS reimbursement rules.

The Financial Impact of Billing Errors

Billing errors in virtual care can significantly reduce revenue. Industry denial rates typically range from 5% to 10%, but many providers now experience rates as high as 15%. In 2022, denials accounted for about 11% of all claims, resulting in substantial financial losses for providers, often amounting to hundreds of thousands of dollars. These denials lead to delayed payments and increased administrative costs, emphasizing the need for accurate billing and claims management.

Top denial causes include inaccurate data, missing authorizations, and incomplete documentation-all amplified in telehealth by added requirements like patient location, technology platform, and clinical justification.

Specialty-Specific Telemedicine Billing Challenges

1. Internal Medicine
   Practices that manage chronic conditions via telehealth must code accurately for complex visits while meeting CMS documentation standards.
2. Endocrinology
   Endocrinologists managing diabetes and hormonal disorders must understand the distinct CPT codes for remote glucose monitoring and hormone-related consultations to ensure compliant billing.
3. Behavioral Health
   Behavioral health has seen the highest adoption in virtual care. Teletherapy requires correct use of psychotherapy codes (90832–90838) and thorough documentation of session length, interventions provided, and patient progress.
4. Neurology
   Tele-neurology includes virtual stroke follow-ups, epilepsy monitoring, and headache management. Billing requires precise coding of both technical and professional components for procedures such as EEGs and EMGs.
5. Gynecology
   Telehealth in gynecology covers contraceptive counselling, prenatal care, and postpartum visits. Identifying which women’s health services CMS reimburses virtually is essential for compliance.

Technology Platform Requirements

CPT codes do not define technical standards, but CMS requires two-way, real-time audio-video communication for most telehealth services. Audio-only visits (previously coded with 99441–99443) have been deleted by CPT and are only reimbursed by Medicare under specific conditions, such as when the patient cannot or does not consent to video use. Providers must use compliant, secure platforms to ensure payment eligibility and minimize audit risk.

Additionally, patient identity verification and documentation of consent and clinical justification are increasingly emphasized for Medicare telehealth claims.

The Evolving Regulatory Landscape

Regulations for Medicare and telemedicine continue to evolve. While approximately 80% of physicians remain committed to offering telehealth, CMS is actively phasing out several pandemic-related flexibilities. By late 2025, telehealth usage among Medicare beneficiaries has stabilized around 15%, confirming its role as a lasting fixture in healthcare delivery even as coverage rules tighten and new compliance requirements take effect.

Providers must stay informed about CMS updates, reimbursement rates, and coverage policies. For multi-specialty practices, maintaining compliance across different service lines requires dedicated billing expertise.

Maximizing Reimbursement and Ensuring Compliance

To succeed in telehealth reimbursement:

• Document comprehensively: Include patient location, technology used, and clinical justification.
• Verify eligibility: Verify coverage eligibility before appointments.
• Manage denials proactively: Use claim scrubbing tools to catch errors early.
• Train staff: Train staff regularly on CPT and CMS distinctions.
• Invest in technology: Invest in CMS-approved, secure telehealth technology.

The Role of Expert Billing Partners

Due to the complexity of virtual care reimbursement, many practices benefit from specialized billing partners. Emerald Health, a leading revenue cycle management provider, has helped small and mid-sized practices collect over $150 million in revenues over 15 years.
With expertise across Internal Medicine, Endocrinology, Neurology, Behavioral Health, and Gynecology, Emerald Health ensures compliance with both CPT and CMS policies. Their analytics-driven approach maintains a customer retention rate near 100% and a denial rate below 3%.

In a landscape where claim denials cost U.S. healthcare systems an estimated $262 billion annually, expert billing support is an investment in financial stability and compliance.

Practical Steps Forward

1. Create specialty-specific billing protocols aligned with CMS requirements.
2. Verify coverage eligibility before telehealth visits.
3. Track denial trends and resolve recurring issues.
4. Adopt automation tools for clean claims.
5. Stay updated with CMS changes.
6. Partner with billing experts who specialize in Medicare and Telemedicine compliance.

Conclusion

Understanding how CPT codes and CMS guidelines interact within virtual care billing is vital for both compliance and revenue optimization. CPT codes define what was done; CMS determines if it’s reimbursable.

As telehealth continues to expand-average 2.5 telemedicine visits per person in high-use systems), accurate billing practices make the difference between financial growth and loss.
Staying proactive about documentation, regulations, and billing support will help providers navigate the growing virtual care landscape with confidence while ensuring both high-quality care and sustainable financial performance.