Federal Telehealth Policy — Medicare, Medicaid & Virtual Care

Federal telehealth policy governs when and how Medicare, Medicaid, and other federal health programs pay for healthcare delivered through video, audio, and digital technologies rather than in-person visits. Before the COVID-19 pandemic, Medicare telehealth was severely restricted — limited to patients in rural areas, at designated originating sites (like hospitals or clinics, not the patient's home), and for a narrow list of services. The pandemic shattered those restrictions overnight: Congress and CMS waived virtually all telehealth limitations, allowing any Medicare beneficiary to receive telehealth from any location (including home) for any covered service. Telehealth utilization exploded from roughly 1% of Medicare visits pre-pandemic to over 40% at the peak. The policy question since has been which of these emergency flexibilities to make permanent. Congress has extended most Medicare telehealth flexibilities through December 31, 2026, while CMS and Congress debate the permanent framework. An estimated 40-50 million Medicare beneficiaries now have access to telehealth services that didn't exist before March 2020.

Current Law (2026)

Legal Authority

• 42 U.S.C. § 1395m(m) — Telehealth services under Medicare (defines eligible telehealth services, originating site requirements, geographic limitations, provider types, and payment rates; CMS maintains the Medicare Telehealth Services List)
• Consolidated Appropriations Act, 2023 (and subsequent extensions) — Extended COVID-era telehealth waivers through 12/31/2026, including home as originating site, removal of geographic restrictions, audio-only coverage, and FQHC/RHC telehealth authority
• SUPPORT Act (2018) — Expanded Medicare telehealth for substance use disorder treatment and mental health
• VA MISSION Act (2018) — Authorized VA healthcare providers to deliver telehealth to veterans regardless of state licensure requirements

How It Works

Under the permanent Medicare statute, telehealth has historically been limited to patients at designated originating sites (medical facilities — not the patient's home) in rural Health Professional Shortage Areas or counties outside Metropolitan Statistical Areas, for only a specific listed set of services. A Medicare patient in suburban Chicago couldn't get a telehealth visit with their cardiologist — they had to drive in even for a purely consultative call. The COVID-19 pandemic shattered those restrictions: starting in March 2020, the CARES Act and CMS emergency waivers allowed patients to receive telehealth at home, in any geographic area, from an expanded list of providers (including FQHCs, physical therapists, occupational therapists, and speech pathologists), and — critically — via audio-only telephone when video wasn't available. That last flexibility mattered enormously for elderly and low-income patients without smartphones or broadband. Medicare telehealth visits surged from 840,000 in 2019 to over 52 million in 2020.

Congress has extended most of these pandemic flexibilities through December 31, 2026 — creating a policy cliff. Without new legislation, Medicare telehealth reverts January 1, 2027 to the pre-pandemic framework: home eliminated as an originating site, geographic restrictions reimposed, audio-only coverage ended, FQHCs and RHCs removed. Both parties support making many flexibilities permanent, but debates persist over which services should remain telehealth-eligible, whether audio-only quality is sufficient, how to address significant telehealth fraud that emerged during the pandemic, and whether telehealth rates should equal in-person reimbursement. The Ryan Haight Act's pre-pandemic requirement for an in-person evaluation before prescribing controlled substances via telehealth was also waived — allowing buprenorphine prescriptions for opioid addiction treatment and other controlled substances based solely on telehealth visits; DEA has extended these flexibilities through 2026 while developing permanent telemedicine prescribing rules. Unlike Medicare, Medicaid telehealth policy is set by each state, with wide variation in covered services, permitted modalities (video, audio, store-and-forward), reimbursement rates, and eligible provider types.

How It Affects You

If you're a Medicare beneficiary using telehealth: The COVID-era expansions — which allow you to receive most Medicare-covered services via video or phone from your home, regardless of where you live — have been extended through December 31, 2026. After that date, absent congressional action, Medicare telehealth reverts to pre-pandemic restrictions: most services require you to be in a rural health professional shortage area and travel to a medical facility (not your home). The 2026 extension is expected to be the last "temporary" extension before Congress either makes the expansions permanent or lets them expire. What's currently covered through 2026: video and audio-only (phone) visits for primary care, specialist consultations, mental health therapy, psychiatry, and many other services. You pay your normal Part B cost-sharing (20% after deductible). Medicare pays the same rate as in-person visits — your provider is not penalized for offering telehealth. What telehealth is best for: medication management, follow-up appointments, mental health therapy, and chronic disease management where physical examination isn't essential. What still requires in-person visits: services requiring lab tests, imaging, or hands-on physical assessment. You can request a telehealth appointment for any visit that's clinically appropriate — you're not required to appear in person. Medicare mental health telehealth specifically: therapy and psychiatric services from home are covered; psychologists, clinical social workers, and psychiatric nurse practitioners are eligible providers.

If you're a healthcare provider or telehealth company navigating the 2026 policy cliff: The extension through December 31, 2026 is built into the Consolidated Appropriations Act. Without additional legislation, the Medicare telehealth flexibilities — including home as an originating site for most services, expanded eligible provider types, and audio-only coverage — expire. For controlled substance prescribing via telehealth: the DEA's 2024 telemedicine rules created a Special Telemedicine Registration pathway for prescribing Schedule III-V controlled substances without a prior in-person exam for certain providers and conditions — verify the current DEA rules before prescribing to telehealth-only patients, as this was an area of active regulatory revision. State licensure: you must be licensed in the state where the patient is located, not where you're physically situated. The Interstate Medical Licensure Compact (IMLC) now covers 40+ states and allows expedited multistate licensure — if you're seeing patients across state lines, IMLC is worth exploring. Similar compacts exist for nursing (NLC) and licensed counselors (CPSC). For billing: use modifier 95 for synchronous telemedicine, modifier 93 for audio-only — and document the visit modality explicitly in the record.

If you're on Medicaid or private insurance and wondering what's covered: Medicaid telehealth varies by state — all 50 states now cover at least some telehealth services, but covered modalities, eligible providers, and reimbursement rates differ significantly. The Center for Connected Health Policy (CCHP) at cchpca.org maintains a comprehensive 50-state telehealth policy tracker — the most reliable source for your state's Medicaid rules. For private insurance: 43 states have enacted telehealth parity laws requiring insurers to reimburse telehealth at the same rate as in-person services. If your insurer denies a telehealth claim or reimburses it at a lower rate than the equivalent in-person service, check your state's parity law — many denials are improper. Mental health telehealth through private insurance is covered at parity under the Mental Health Parity and Addiction Equity Act for most plans. HSA and FSA funds can pay telehealth cost-sharing. For marketplace plans (ACA exchange plans): telehealth is required to be covered for certain preventive services at no cost-sharing; most plans also offer telehealth beyond preventive coverage, but check your specific plan's Summary of Benefits.

State Variations

Telehealth policy varies significantly at the state level:

• State Medicaid programs set their own telehealth coverage, reimbursement, and modality rules
• State medical licensure laws generally require providers to be licensed in the state where the patient is located (with some interstate compact exceptions)
• The Interstate Medical Licensure Compact (IMLC) allows expedited licensure across 40+ member states
• State telehealth parity laws may require private insurers to cover and reimburse telehealth at parity with in-person visits
• State prescribing laws interact with DEA telehealth prescribing rules for controlled substances

Implementing Regulations

• 42 CFR 410.78 — CMS telehealth services under Medicare: originating site requirements, eligible practitioners, the covered services list (Medicare Telehealth Services List), payment methodology, and conditions for telehealth coverage — the primary CMS regulatory implementation of 42 U.S.C. § 1395m(m) governing which Medicare telehealth services are covered and how they are paid
• 42 CFR 482.12(a)(8) — Hospital conditions of participation for telemedicine services: requirements for hospitals that use telemedicine services from distant-site hospitals or practitioners, including credentialing and privileging standards and quality oversight obligations
• 21 CFR Part 1306 — DEA prescriptions via telemedicine: controlled substance prescribing through telehealth, including the in-person examination requirement under the Ryan Haight Act, authorized exemptions, and the temporary flexibilities (extended through 2026) allowing controlled substance prescribing — including buprenorphine for opioid use disorder — based solely on a telehealth evaluation

Pending Legislation

Telehealth extension and expansion provisions appear in broader healthcare legislation. See Medicare Telehealth and Rural Healthcare.

Recent Developments

The CONNECT for Health Act (introduced in multiple Congresses with bipartisan support) would permanently remove Medicare's geographic and originating site restrictions for telehealth — the most significant proposed permanent reform. CMS has permanently added over 100 services to the Medicare Telehealth Services List based on pandemic experience. OIG investigations have uncovered significant telehealth fraud schemes — particularly "telefraud" operations where fraudulent telemedicine companies bill Medicare for unnecessary services — leading to billions in enforcement actions. The debate over audio-only visits continues: supporters argue they're essential for digital-equity (serving patients without broadband), while critics worry about quality and fraud risk. Integration of remote patient monitoring (RPM) — continuous vital sign tracking through wearable devices — with telehealth visits represents the next frontier of virtual care delivery.

• COVID telehealth extensions through 2026: The telehealth waivers enacted during the COVID public health emergency have been repeatedly extended by Congress. The most recent extension — through December 31, 2026 — was included in a continuing resolution. Without a permanent legislative fix, telehealth coverage for Medicare beneficiaries (particularly geographic restrictions, originating site requirements, and audio-only visit coverage) reverts to pre-pandemic rules, which would eliminate telehealth access for many rural beneficiaries. The CONNECT for Health Act or similar permanent legislation needs to pass before December 2026 to avoid a "telehealth cliff."
• DEA telehealth prescribing rule for controlled substances: The DEA's proposed rules for telehealth prescribing of controlled substances without an in-person visit (required under the Ryan Haight Act) have been repeatedly delayed. The Biden DEA proposed a framework allowing controlled substance prescriptions via telehealth under certain conditions; the Trump administration has continued to extend the COVID waiver while finalizing permanent rules. The issue is particularly important for buprenorphine (used to treat opioid use disorder) — requiring an in-person visit for initial prescriptions creates a significant barrier to accessing addiction treatment, particularly in rural areas.
• Telehealth fraud enforcement continues: Despite the policy expansion, telehealth has been a major vector for healthcare fraud. DOJ and HHS OIG have brought multi-billion-dollar fraud cases against telehealth companies that billed Medicare and Medicaid for medically unnecessary services — urine drug screens, genetic tests, durable medical equipment — ordered through cursory telehealth encounters. A 2024 DOJ healthcare fraud takedown included $2.7 billion in false claims by telehealth companies. The fraud has created political tension: policymakers want to support legitimate telehealth while preventing abuse.
• Mental health telehealth demand (2025-2026): Mental health and substance use disorder telehealth has been one of the most significant utilization shifts from the pandemic. Before COVID, most therapy and psychiatry was delivered in person; by 2025, a substantial majority of mental health visits were conducted via telehealth, with strong patient satisfaction. Maintaining telehealth access for behavioral health is a bipartisan priority — even legislators skeptical of telehealth expansion for medical/surgical services have supported preserving behavioral health telehealth flexibility.