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EDITOR’S NOTE: National Quality Forum (NQF) issued two new reports this week that provide guidance to advance health information technology, with the intent of making healthcare more effective and safer for all Americans.

The terms “telemedicine” and “telehealth” have been used interchangeably in healthcare, but there is a difference. Telemedicine is considered the clinical application of technology, while telehealth encompasses a broader, consumer-facing approach – “a collection of means or methods, not a speci­fic clinical service, to enhance care delivery and education,” according to the federal network of telehealth resource centers. 

Telehealth is not a new concept. In 1925, Hugo Gernsback developed a concept for a teledactyl, a tool that used robot-like fingers along with radio technology to examine a patient from a distance via a video feed. Unfortunately, this tool was never actually produced, but rather predicted as a future path for medicine. 

According to the American Telemedicine Association (ATA), telehealth has four primary benefits:

  1. Improves patient access
  2. Reduces cost
  3. Improves quality and safety
  4. Improves patient satisfaction

More than 15 million American received some form of medical care remotely in 2015,” the ATA recently reported, “and the numbers are expected to grow by 30 percent in 2017.” 

There are many pieces of federal legislation regarding telehealth that are now under consideration. In 2016, Congress passed the 21st Century Cures Act, which boosted funding for medical research, eased the development and approval regulations for experimental treatments, reformed federal policy on mental health care, and lastly, addressed the expansion of telehealth. 

The Medicare Telehealth Parity Act of 2017 is just one more piece of legislation being considered this year to remove Medicare coverage restrictions on telehealth services and improve patient access. The Act is broken down in three phases with the following proposed actions:

Phase 1: Expand the types of practitioners who can provide telehealth services, to include certified diabetes educators, audiologists, and respiratory, occupational, speech/ language, and physical therapists. This phase would also result in the expansion of the originating sites to include all Federally Qualified Health Centers (FQHCs) and all rural clinics, including facilities in counties in metropolitan statistical areas with populations of less than 50,000. This phase also would provide Medicare coverage of asynchronous telehealth services across the country, not just those provided in Alaska and Hawaii.

Phase 2: Expand services offered in certain geographic locations, including counties in metropolitan statistical areas with populations of 50,000 to 100,000, and add homes as a covered originating telehealth site.

Phase 3: Further expand the originating sites to include counties in metropolitan statistical areas with populations above 100,000. This phase of the Act would authorize the Centers for Medicare & Medicaid Services (CMS) to develop and implement new payment methods for these telehealth services.

Another important piece of legislation is the CONNECT (Creating Opportunities Now for Necessary and Effective Care Technology) Act. This Act has five goals:

  1. Expand the telehealth platforms in ACOs (Accountable Care Organizations) and Medicare Advantage plans, as well as for patients undergoing home dialysis and those involved in stroke treatment programs.
  2. Expand remote monitoring programs for patients with chronic conditions.
  3. For community health centers and rural health clinics, expand and integrate technology into bundled and global payment programs.
  4. Allow the U.S. Department of Health and Human Services (HHS) the authority to lift geographical limitations, originating site restrictions, and asynchronous services restrictions when specific criteria are met.
  5. Allow for expansion of telehealth for behavioral services.

There are many other pieces of legislation being considered in 2017 to expand telehealth services in the U.S.

So, who benefits from telehealth services? That list includes patients, practitioners, critical access hospitals and payers.

For patients, the benefits can include the following:

  • Patients can receive quality care rather than foregoing treatment.
  • Travel is not necessary to receive specialty care, saving the costs of travel when an overnight stay would be necessary.
  • Restrictions due to inclement weather are mitigated.
  • Patients can stay in their community when hospitalized and still receive specialty care when needed.

Practitioner benefits can include the following:

  • There is quicker access to specialists available when consults are necessary.
  • Practitioners can see more patients, easing any shortage of providers.
  • Specialists who travel to a rural HPSA location to provide care can now save time and money, avoiding travel and allowing for more patient time.

Critical access hospitals (CAHs) can experience the following benefits:

  • More access to expanded specialty services
  • Better community relations because of service expansion
  • More revenue for hospital patients who can be managed at the originating site while receiving specialty care that could not be previously offered

Payer benefits can include:

  • Patients can receive care sooner, saving costs
  • Reduced emergency transport costs
  • CAHs are less costly than larger facilities

CMS Rules and Regulations for Telehealth Services

Understanding basic information and terminology related to telehealth services is critical. The following terms are frequently used: 

  • Originating site: Where the patient is when receiving services.
  • Distant site: The location of the practitioner providing the telehealth service.
  • Synchronous: Live, two-way video conferencing.
  • Asynchronous: Storage and forwarding method in which information is transmitted by electronic means to another practitioner who used to treat the patient. 
  • Remote patient monitoring (RPM): Wherein patient information is transferred electronically to a practitioner or caregiver in a different location who monitors, reviews, and/or takes action based on the information received.
  • Mobile health: The use of a mobile device (tablet, smartphone, computer, etc.) to monitor, collect, and/or track patient data to facilitate patient/practitioner communication.

Note: The asynchronous method is currently allowed only in Alaska and Hawaii.

The originating site must be located either in a county outside of a metropolitan statistical area (MSA) or a rural health professional shortage area (HPSA) located in a rural census tract. The originating sites (location of patient) include the following:

  • Practitioner’s offices
  • Hospitals
  • Rural health clinics
  • Federally Qualified Health Centers (FQHCs)
  • CAHs
  • Skilled Nursing Facilities (SNFs)
  • Community mental health centers
  • Hospital-based or CAH-based renal dialysis centers, including satellites

Based on CMS coverage criteria, an independent renal dialysis facility is not considered an originating site.

Practitioners who can bill for telehealth services at a distant site include the following:

  • Physicians
  • Nurse practitioners and physician assistants (NPPs)
  • Nurse-midwives
  • Clinical nurse specialists (CNSs)
  • Certified registered nurse anesthetists
  • Clinical psychologists (CPs) and clinical social workers (CSWs)
  • Registered dietician or nutrition professionals

Note: CPs and CSWs cannot bill for psychiatric diagnostic interview exams with medical services or medical evaluation and management services under Medicare. All practitioners must practice within their scope under state law.

There are four conditions that must be met for payment eligibility from CMS for telehealth services. The service must be furnished:

  1. Via an interactive two-way telecommunication system (synchronous)
  2. By a physician or authorized practitioner
  3. With an eligible telehealth individual
  4. By a patient receiving service must be in a telehealth approved originating site.

Alaska and Hawaii are the only two states that can provide telehealth services via the asynchronous communication method.

The place-of-service code 02 is used for the location where the health-related services are provided through the telehealth technology (distant site). The originating site reports the place of service code where the patient is located (office, hospital, SNF, etc.).

Services Covered under CMS

CMS reimburses telehealth services at the same reimbursement rate as face-to-face visits. If the practitioner is located in a CAH and reassigns billing to the hospital (elected optional payment method), the CAH will bill Medicare for the telehealth services and be paid 80 percent of the physician fee schedule for the telehealth service. The facility where the patient is located (originating site) is paid a facility fee for telehealth services by using HCPCS code Q3014 (telehealth originating site facility fee). For end-stage renal disease (ESDR) the practitioner (physician, NPP, CNS) must see the patient face to face each month to examine the patient’s vascular access site.

There are three modifiers used to report telehealth services:

  1. GT: Via interactive audio and video telecommunication systems. This modifier is used to indicate telehealth services. Except for demonstrations in Alaska and Hawaii, all telehealth must be interactive.
  2. GQ: Via asynchronous telecommunications system. This modifier is used to indicate telehealth services.
  3. 95: Synchronous telemedicine service rendered via real-time interactive audio and video telecommunications system. This modifier should be used for private or commercial payers.

Documentation must include a statement that the service was provided via telehealth, the method of communication, location of the patient and the provider, the names of all persons participating in the telehealth service, and their roles in the patient encounter. In addition, the documentation requirement for the CPT®/HCPCS code reported must be met.

The physician fee schedule used should correspond to where the distant site provider is located.  For example, if the physician (distant site) is in Indiana and the practitioner is providing telehealth services to a patient in Ohio, the PFS used would be the Indiana fee schedule.

The CPT/HCPCS codes that have been approved for telehealth services can be found online at: https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/TelehealthSrvcsfctsht.pdf 

The CMS proposed rule for physician services calls for the elimination of the telehealth modifier for professional claims since the new place of service (POS) code 02 identifies telehealth services and is redundant. CMS is also asking for comments in the proposed rule on ways to further expand access to telehealth services, within their statutory authority.

Keep in mind that private/commercial payer coverage varies by payor. It is important to review payer policies for telehealth services prior to providing the services. Continue to monitor payer and CMS policies as new legislation is passed to expand telehealth services.


Reporting telehealth services can be complex and confusing. Understanding the coding rules and payment regulations for all payers, not just CMS, is critical. Telehealth services are becoming more prevalent in healthcare, creating an opportunity to provide expanded services to HPSA areas now and hopefully more communities in the future. It is doubtful that telehealth will replace face-to face visits entirely, but they can be an important tool in providing services to patients in rural areas where resources are limited.


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