Telehealth Reimbursement, physician fee schedule, PFS

Telehealth Reimbursement Update: Comment Period Now Open


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As discussed in a number of recent articles, Medicare seems to be opening the floodgates for telehealth reimbursement more than any other reimbursement source on the digital horizon. For a quick summary, see Future of Telehealth Reimbursement: Offering Medicare Telehealth Services?

The cornerstone of Medicare payment for healthcare services is the Physician Fee Schedule (PFS), which changes every year with new CPT codes and their specifications, including those for supporting ongoing telehealth reimbursement. As the backbone of healthcare in the United States, decisions about Medicare have far-reaching repercussions, because most of the other insurance reimbursement carriers in the US follow the lead set by the Centers for Medicare & Medicaid Services (CMS). See the 2021 Physician Fee Schedule for Behavioral Health & Telebehavioral Health for a brief overview of the current PFS and how it is already quite inclusive of telehealth reimbursement.

As of July 13, CMS has announced proposed changes to the PFS, including changes for telehealth reimbursement. Most importantly, CMS is now actively seeking comments from the public on its proposal. Whatever decisions made will refine the existing structure that described in the article 2021 Physician Fee Schedule for Behavioral Health & Telebehavioral Health. They’re currently expected to take effect on or after January 1, 2022.

Telehealth Reimbursement Updates Continue to Look Promising

The most immediate and notable change suggested by this proposal concerns the telehealth services added to the PFS during the past two years. In the present form, it would not only extend them into 2022 but rather all the way to December of 2023.

The proposal would also remove geographic restrictions on the service. Clinicians could now claim their client’s home as the originating site for telehealth services dedicated to “the purposes of diagnosis, evaluation, or treatment of a mental health disorder.” This change would carry the necessity of an in-person session for the client within six months of the intake and additional in-person sessions at least once every six months after that.

While clinicians would still need to be able to provide two-way audio and visual communications for clients, a rule change here would allow them to still charge for audio-only sessions in situations where the clients, for whatever reason, cannot communicate visually at the same time. This change will allow clients with less access to technology or issues with internet service to still access teletherapy services and clinicians to still be able to receive appropriate payment for those services.

The Current Proposed Changes to the Physician Fee Schedule Are Not All Positive

The biggest area of concern stems from changes to the conversion factor. In order to be budget neutral, the new legislation is proposing a more than dollar reduction in the conversion factor. While a dollar in the abstract may not sound like much, one has to keep in mind that it is a dollar off of each billable unit–typically 30 minutes. The potential loss of income quickly mounts.

Additionally, the dollar-plus reduction needs to be considered against the backdrop of inflation. With an average estimated inflation rate of 5.39% from last year to now, even keeping rates flat would represent a loss of revenue for clinicians. Add in the more than a dollar reduction, and it hits that much harder.

What Telehealth Reimbursement Updates Could Mean for Telehealth’s Future Sustainability

The extension to December of 2023 does more than provide clinicians more time to utilize and receive proper telehealth reimbursement. It also provides more time for the evaluation of the added telehealth services. If determined to be valuable to the clients and cost-efficient, this extended evaluation could lead to some or all telehealth-related services added temporarily to the PFS to be permanently included.

Therefore, if adopted, the proposal not only ensures telehealth reimbursement in the short term, but it also provides the most promising sign of telehealth’s utility being permanently recognized by CMS. Clinicians who continue to utilize telehealth and teletherapy services can thus expect a reliable, efficient source of revenue.

Get Involved

As noted earlier, CMS has made itself open for comments on the proposal. In regards to telehealth changes, they’re specifically seeking feedback on the following:

  • Whether additional documentation should be required in the patient’s medical record to support the clinical appropriateness of audio-only telehealth
  • Whether or not we should preclude audio-only telehealth for some high-level services, such as level 4 or 5 E/M visit codes or psychotherapy with crisis
  • We should consider putting any additional guardrails in place to minimize program integrity and patient safety concerns.

Not specified on this list, but mentioned in the telehealth portion of the proposal, is that CMS is also seeking comments on the length of time before an in-person session must occur and, after that, how many months should elapse before another such in-person session takes place. The current proposal suggests six months.

Where and How to Add Your Comments

We at encourage all of you to be advocates for change by offering comments on these issues. Clearly state your perspective about the necessity of telehealth and how expanding and extending the PFS to reflect that necessity will be a net good. Include a case example without identifying any patient or client. As with so many possible changes regarding telehealth and teletherapy work, we stand at an inflection point. Acting now helps ensure the future of the service for you and your clients.

Optimizing Telehealth Billing Current Telehealth CPT Codes Telehealth Reimbursement Strategies

Increase your telehealth revenue. Industry leaders explain how, when, and why to use telehealth CPT codes and modifiers.

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