Medicaid Reimbursement For Telemedicine

Are you a healthcare provider and curious about whether your telehealth program will be eligible for Medicaid reimbursement? If you are, you aren’t alone. Navigating how and when reimbursement occurs can be tricky at first. Interwoven networks of insurers, providers, billing companies, and the government create a web that can be difficult to pick apart.

At Beam, we believe in simplifying the process of providing quality telemedicine to your patients, whatever your practice may be. That’s why we work with providers to clearly explain how Medicaid reimbursement rates will work for you when using a telehealth platform. There is a lot of variation in how reimbursement for telehealth works, much of it depending on the state that you are operating out of. Let’s dive into some of the details about how Medicaid telehealth reimbursement works. 

What is Medicaid?

Medicaid is a program that is jointly funded by both states and the federal government with the goal of providing healthcare and related services to low-income individuals. 

Medicaid was created through the passage of Title XIX of the Social Security act in 1965. It was conceived alongside Medicare, the program used to provide insurance to individuals over 65 years of age or people receiving disability benefits. An additional health coverage program for children too young to qualify for Medicaid, known as the Children’s Health Insurance Program (CHIP), was created in 1997.1

How is Medicaid Coverage Determined?

A critical feature of Medicaid is that the states are largely responsible for determining the extent of their coverage. Though the federal government provides an overarching framework that states must work within, each state has a high degree of discretion to determine what primary care and specialized services they cover.2

If you are a physician looking to incorporate telemedicine into your practice to improve patient access to care, reduce delays in care, and reach more patients, you’ll have to turn to the individual Medicaid program in your state to determine what’s eligible for reimbursement. Once you have determined which services to offer, you will be given specific HCPCS codes to apply before a transaction is made by the patient. Whether you are knowledgeable of these key applications or not, we can help answer the common question of “what are HCPCS codes?

Due to the current pandemic, if you need to transition immediately to telehealth appointments you might need fast, clear answers about what is covered in your state. Our expert support staff can talk to you about Medicaid telehealth reimbursement coverage in the states you operate in so you can make a fully informed decision. If you are at a standstill and find yourself asking questions like, “what are telemedicine services and which should I offer” we are here to help guide you in the right direction for your practice.

How Does This Impact Telemedicine Specifically?

Uneven Medicaid coverage for telehealth services at the state level has created a patchwork of different levels of coverage across the country, as each state must determine whether to cover telehealth services and if so, which services to cover. At a federal level, Medicaid telehealth is viewed as a cost-effective alternatively modality to provide care to patients. Federal guidance urges states to encourage the adoption of telehealth where appropri

This endorsement for the benefits of telemedicine allows each state Medicaid program to determine whether or not to cover telemedicine. If states do cover telemedicine, a myriad of questions arises. Each state must determine whether telehealth is covered under their Medicaid program, what types of telemedicine are eligible for coverage, and how reimbursement occurs for telemedicine services. Once these determinations have been made, additional important questions arise such as how patient setting impacts the reimbursement rate, what appropriate originating sites are, and whether to implement coverage parity between in-person and telehealth appointments.

Due to the flexibility that each state has in determining whether it covers telehealth services and if so, which services it covers, it is challenging for many providers to determine which of their services are eligible for reimbursement. This patchwork approach to coverage for telehealth services also presents unique challenges for primary care providers operating in multiple states, not only in determining which services to offer but also how to communicate those services to new and existing Medicaid patients.

One of the best ways to gain a better understanding of the current state of play for the Medicaid telehealth reimbursement rate is to look at contested areas of coverage. This sheds light on how different areas are similar, and how they diverge in their reimbursement coverage. Factors like whether the patient setting is a condition for payment, parity between in-person and telehealth coverage, coverage for asynchronous technology appointments or remote patient monitoring, and what provider types telehealth coverage is limited for are all useful to look at to gain a better understanding of how widespread or limited coverage is in a given state Medicaid program. 

Provider Types

States can choose to limit telehealth coverage to only certain provider types. 26 states and the District of Columbia do not have any restrictions in place for provider types, while 10 states have restrictions that authorize six or more provider types. Alabama is the only state in the United States to limit telehealth solely to physicians, while many other states allow nurse practitioners, mental health professionals, physical therapists, and occupational therapists to also conduct telehealth visits and related services.

There are reasons to be optimistic that states will continue to reduce or eliminate these barriers to care. For example, California recently authorized marriage and family therapists for telehealth services. Illinois now allows clinical psychologists and social workers to use telehealth.4

Coverage Parity

Coverage parity occurs when states treat telehealth and in-person visits the same for coverage and billing purposes under Medicaid. Coverage parity is an important metric for understanding how widespread coverage for telehealth services. Currently, there are 21 states and the District of Columbia that offer coverage parity between in-person and telehealth services under a Medicaid reimbursement policy. 

28 states offer payment parity, meaning their telehealth policies for payment services match up to their in-person payment policies. States have tended to regulate payment policies for telehealth under Medicaid far less than for private payers. While a greater number of states offer coverage parity with private payers, currently 36 and the District of Columbia, only 16 maintain a policy of payment parity for private payers.

While coverage parity for telehealth services has seen increased adoption in states over recent years, 19 states have not adopted any parity policies.5

Telehealth Modalities

16 states currently limit telehealth solely to synchronous technologies or telehealth services where a direct and continuing interaction occurs between the patient and physician. Asynchronous technologies, such as store and forward (S&F) transfer are becoming more popular. 29 states currently offer coverage for S&F transfer, while 22 states offer coverage for remote patient monitoring (RPM). Some have begun offering coverage for audio-only services. 

The wide variation in coverage for different telehealth modalities should encourage providers to dig deeper into Medicaid telehealth coverage policies in their state to determine whether offers flexibility in their coverage. Certain states offer greater flexibility in telehealth modality depending on the condition being treated. For example, Texas offers RPM for asthma, cancer, and mental illness among other conditions. This demonstrates why having a firm understanding of the coverage policies in your state is critical for reimbursement purposes.6

Patient Setting

During the current pandemic, many restrictions over eligible patient settings have been temporarily lifted, allowing a far greater number of providers to conduct telehealth appointments with patients who are in their own home. In a normal environment for Medicaid and telehealth, only 29 states do not condition reimbursement upon the setting for the patient during the telehealth conference.

Only 12 states allow the home to serve as an originating site for telemedicine services, and only 12 and the District of Columbia allow school districts as an originating site.7 It is possible that the current pandemic and stay at home restrictions that have forced a rapid adoption of telehealth may introduce lasting changes to restrictions on patient setting and origination.

Closing Thoughts

Medicaid reimbursement for telehealth services can be complicated. Though Medicaid is a joint effort between the federal government and individual states, the federal government only provides general guidelines for coverage and reimbursement for Medicaid recipients. Each state can choose whether they want to cover telehealth services under their Medicaid program. Once that decision has been made, each state has to choose what limits they will place on that coverage for each enrollee.

The majority have adopted coverage and payment parity policies, creating a structure where telehealth services are treated the same as in-person services for both coverage and billing. However, 19 do not maintain coverage or payment parity. States also offer different coverage under Medicaid based on the medical service origination point, telehealth modality, and type of provider.

While progress has been made in creating more equitable access to telehealth services under Medicaid, the patchwork nature of coverage today can lead to significant challenges for providers that wish to offer some type of telehealth services. This is particularly true for providers that operate in multiple states. Understanding how Medicaid reimbursement for telemedicine functions in your state is essential.

Are you ready to incorporate telehealth into your practice but aren’t sure about how reimbursement will work in your state? Contact us at Beam! As one of the top rated HIPAA compliant telehealth platforms, our expert staff can walk you through Medicaid coverage in your specific state and provide targeted guidance about what’s covered, what isn’t, and what your options are. Using Beam’s cutting-edge telemedicine platform, you can quickly and cost-effectively begin incorporating telemedicine into your practice. To learn more, contact Beam today.


  4. 2019 State of the States Coverage and Reimbursement Report, American Telemedicine Association. 13-15
  5. 2019 State of the States Coverage and Reimbursement Report, American Telemedicine Association. 17-18
  6. 2019 State of the States Coverage and Reimbursement Report, American Telemedicine Association. 9-11
  7. 2019 State of the States Coverage and Reimbursement Report, American Telemedicine Association. 6-8