Telemedicine: Bridging Gaps in Healthcare Delivery

By Anita Majerowicz, MS, RHIA, and Susan Tracy, MA, RHIT

Traditionally, healthcare has been provided in the physician’s office, hospital, or outpatient clinic. Patient care has been based primarily on face-to-face contact, with the exchange of information via conversation.

However, technology is changing how and where care is delivered. Many patients now expect to interact with their providers online, and barriers that once prevented some patients from receiving care can be removed using telecommunication tools.

In light of these advances, it is important for coding professionals to understand telemedicine reimbursement policies.

Defining Telemedicine and Telehealth

Telemedicine differs from the more general concept of telehealth. The American Telemedicine Association offers the following definitions:

[Telemedicine is] the use of medical information exchanged from one site to another via electronic communications to improve patients’ health status. Closely associated with telemedicine is the term “telehealth,” which is often used to encompass a broader definition of remote healthcare that does not always involve clinical services. Videoconferencing, transmission of still images, e-health including patient portals, remote monitoring of vital signs, continuing medical education and nursing call centers are all considered part of telemedicine and telehealth.1

The Centers for Medicare and Medicaid Services (CMS) defines telehealth (or telemonitoring) as:

the use of telecommunications and information technology to provide access to health assessment, diagnosis, intervention, consultation, supervision and information across distance. Telehealth includes such technologies as telephones, facsimile machines, electronic mail systems, and remote patient monitoring devices which are used to collect and transmit data for monitoring and interpretation.2

Although new applications are increasingly found for using these types of technologies, many barriers remain to making them an integral part of healthcare delivery. One of the most significant obstacles to total integration is the lack of comprehensive reimbursement policies. Currently policies for coverage of telemedicine services vary by state and insurance company.

For purposes of Medicaid, telemedicine is the use of medical information exchanged from one site to another via electronic communications to improve a patient’s health. Telemedicine is viewed as a cost-effective alternative to the traditional face-to-face provision of medical care, which states may choose to cover on an individual basis. CMS has not formally defined telemedicine for the Medicaid program, and the federal Medicaid statute (title XIX of the Social Security Act) does not recognize telemedicine as a distinct service.

Information regarding state government policy on coverage of telemedicine services can be found at

As a condition of payment, CMS requires that the provider of telemedicine use an interactive audio and video telecommunications system that permits two-way, real-time communication. Asynchronous, or “store and forward,” applications do not meet the definition of telemedicine (for the definitions of each, see the sidebar below). Per CMS guidelines, asynchronous technology is permitted only in federal telehealth demonstrations programs conducted in Alaska or Hawaii.

Interactive versus Asynchronous Systems

Interactive audio and video telecommunications system: real-time interactive video teleconferencing that involves the live presence of the provider and patient in an interactive environment. The provider actually sees the patient, so that two-way communication (sight and sound) can take place. In addition, documents, computer-displayed information, and whiteboards can be shared.

Asynchronous, or store and forward, applications: the use of a camera (e.g., audio clips, video clips, still images) to record (store) an image that is transmitted (forwarded) to another site for review at a later time.

Reporting Telemedicine Services

In 2001 Medicare significantly expanded its coverage of telehealth services due to changes in the Benefits Improvement and Protection Act of 2000. However, reimbursement is limited to those eligible individuals who received services at specified originating sites.

CMS requires that reported telemedicine services include both a distant site and an originating site. A distant or hub site is the site at which the physician or other licensed practitioner delivering the service is located at the time the service is provided via a telecommunications system. An originating or spoke site is the location of the patient at the time the service being furnished via a telecommunications system occurs. Telepresenters may be needed to facilitate the delivery of this service.

The originating site must be located in a federally defined rural county or in a designated rural health professional shortage area. Entities outside such areas may still qualify if they participate in a federal telemedicine demonstration project approved or funded by the Department of Health and Human Services as of December 21, 2000, or if they qualify as an originating site regardless of geographic location.

The conditions of payment for Medicare telehealth services, including qualifying originating sites and the types of telecommunication system recognized by Medicare, are subject to the provisions of 42 CFR 410.78. Payment for these services is subject to the provisions of 42 CFR 414.65.

Currently the following originating sites are approved to provide telemedicine services:

  • Physician office
  • Office of practitioner, including physician assistant, nurse practitioner, clinical nurse specialist, certified nurse-midwife, clinical social worker, clinical psychologist, registered dietitian, or nutrition professional (practitioners at the distant site who may furnish and receive payment for covered telehealth services subject to state law)
  • Critical access hospital
  • Rural health clinic
  • Federal qualified health center
  • Hospital (including general acute care and acute psychiatric hospitals)
  • Hospital-based or critical access hospital-based renal dialysis center including satellites (independent renal dialysis facilities are not eligible originating sites)
  • Skilled nursing facility
  • Community mental health center

Per Medicare guidelines, clinical psychologists and clinical social workers cannot submit claims for psychotherapy services that include medical evaluation and management services (codes 90805, 90807, and 90809).

CMS adds and deletes Medicare telehealth services effective January 1 of each calendar year. The changes appear in the annual physician fee schedule (the proposed rule is published in the summer, and the final rule is published by November 1).

In calendar year 2010 CMS expanded coverage of telehealth services effective January 1, 2010. These changes include:

  • Added CPT codes 96150–96152 for individual health and behavior assessment and intervention services
  • Added HCPCS codes G0425–G0427 for initial inpatient telehealth consultations to replace codes CPT codes 99251–99255
  • Expanded coverage of HCPCS codes G0406–G0408 for follow-up inpatient telehealth consultations to include consultative visits provided via telehealth services to beneficiaries in a skilled nursing facility

The Benefits of Telemedicine

The use of telemedicine has spread rapidly over the last several decades and is becoming integrated into healthcare delivery systems at an increasing rate. Telemedicine offers patients and providers benefits that include:

  • Reduced healthcare costs
  • Increased patient access to providers, especially in medically underserved areas
  • Improved quality and continuity of care
  • Faster and more convenient treatment resulting in reduction of lost work time and travel costs for patients

Since CMS eliminated the use of all CPT consultation codes, it no longer recognizes the office and outpatient consultation codes (99241–99245). Office and outpatient visits furnished via telehealth should be reported with codes 99201–99215 for new or established patient visits.

The current list of Medicare telehealth services includes:

  • Initial inpatient telehealth consultation (G0425–G0427)
  • Office or other outpatient visits (CPT codes 99201–99215)
  • Individual psychotherapy (CPT codes 90804–90809)
  • Pharmacologic management (CPT code 90862)
  • Psychiatric diagnostic interview examination (CPT code 90801)
  • End-stage renal disease (ESRD)-related services included in the monthly capitation payment (CPT codes 90951, 90952, 90954, 90955, 90957, 90958, 90960, and 90961)
  • Individual health and behavior assessment and intervention services (96150–96152)
  • Neurobehavioral status examination (CPT code 96116)
  • Follow-up inpatient telehealth consultations (HCPCS codes G0406, G0407, and G0408)
  • Individual medical nutrition therapy (HCPCS code G0270 and CPT codes 97802–97803)

For ESRD-related services, at least one face-to-face, hands-on visit must be furnished each month to examine the vascular access site by a physician, nurse practitioner, physician assistant, or clinical nurse specialist.

Providers at the distant site submit claims for telehealth services using the appropriate CPT or HCPCS code for the professional service along with the telehealth modifier GT, “via interactive audio and video telecommunications system” (e.g., G0406 GT). Appending the GT modifier with a covered telehealth procedure code indicates that the distant site physician or practitioner certifies that the beneficiary was present at an eligible originating site when the telehealth service was furnished.

Appending the GT modifier with a covered ESRD-related service telehealth code certifies that one visit per month was furnished face to face, hands on to examine the vascular access site by the distant site physician or practitioner.

Providers participating in the federal telemedicine demonstration programs in Alaska or Hawaii must submit the appropriate CPT or HCPCS code for the professional service along with the telehealth modifier GQ, “via asynchronous telecommunications system” (e.g., 99215 GQ). Coders should check their individual state Medicaid policies regarding use of modifiers, as these vary from state to state.


  1. American Telemedicine Association. “Telemedicine Defined.” Available online at
  2. Centers for Medicare and Medicaid Services. “Telemedicine and Telehealth.” Available online at

Anita Majerowicz ( is director of clinical coding and reimbursement at AHIMA. Susan Tracy is a coding specialist at the American Medical Association.

Article citation:
Majerowicz, Anita; Tracy, Susan. "Telemedicine: Bridging Gaps in Healthcare Delivery" Journal of AHIMA 81, no.5 (May 2010): 52-53,56.