CMS Telehealth Reimbursement Policies: Understanding Geographic and Originating Site Restrictions for Medicare

The landscape of telehealth reimbursement for Medicare beneficiaries has undergone significant transformations, particularly concerning geographic and originating site restrictions. While the COVID-19 Public Health Emergency (PHE) ushered in an era of unprecedented flexibility, many of these temporary waivers are now expiring or have been modified, necessitating a thorough understanding of the current and future regulatory environment for healthcare providers.

Evolution of Telehealth Reimbursement Under Medicare

Prior to the COVID-19 PHE, Medicare's telehealth policies were highly restrictive. For most services, beneficiaries had to be located in a rural Health Professional Shortage Area (HPSA) and receive care at an approved originating site, such as a physician's office, hospital, or rural health clinic. The beneficiary's home was generally not considered an eligible originating site, severely limiting the reach of telehealth for Medicare patients.

The Public Health Emergency Era (2020-2023)

In response to the COVID-19 pandemic, the Centers for Medicare & Medicaid Services (CMS) implemented broad waivers under Section 1135 of the Social Security Act. These waivers dramatically expanded access to telehealth by:

• Eliminating geographic restrictions: Beneficiaries could receive telehealth services regardless of their location, including urban areas.
• Allowing the home as an originating site: Patients could receive telehealth services from their homes.
• Expanding the list of eligible telehealth providers and services: A wider range of healthcare professionals and services became eligible for telehealth reimbursement.
• Permitting audio-only services: Coverage for certain services delivered via audio-only technology was introduced.

These flexibilities were critical in ensuring continuity of care during the pandemic and significantly boosted the adoption of telehealth across various specialties. The Consolidated Appropriations Act, 2023, extended many of these flexibilities through December 31, 2024, providing a glide path for providers and patients to adjust post-PHE.

Post-PHE and Future Outlook (2025 and Beyond)

With the formal end of the COVID-19 PHE on May 11, 2023, and the legislative extensions set to expire at the end of 2024, the telehealth landscape for Medicare is poised for further changes. While some flexibilities have been made permanent, others are slated to revert to pre-PHE rules unless further legislative action is taken.

Permanent Flexibilities (Effective January 1, 2024, and beyond):

• Mental Health Services: CMS has permanently allowed the home as an originating site for mental health services furnished via telehealth. This includes both audio-visual and audio-only modalities, provided the services meet all other Medicare requirements. A face-to-face visit is required within six months prior to the first telehealth mental health service and at least every 12 months thereafter, though this can be waived by the practitioner if clinically appropriate.
• Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs): These entities can continue to serve as distant sites for mental health and other telehealth services, receiving payment under the Medicare Physician Fee Schedule (PFS) for such services.
• Telehealth Services in the Home: While not a blanket approval, CMS has finalized policies to allow certain services, such as opioid treatment programs (OTPs) and some behavioral health services, to be delivered via telehealth to patients in their homes.

Temporary Flexibilities Extended Through December 31, 2024 (Set to Expire Unless Further Action):

• Geographic and Originating Site Restrictions: The waiver of geographic restrictions and the allowance of the patient's home as an originating site for most non-mental health telehealth services are extended through the end of 2024. This means that through 2024, Medicare beneficiaries can continue to receive telehealth services from any location, including their home, regardless of whether they are in a rural HPSA.
• Eligible Practitioners: The expanded list of practitioners (e.g., physical therapists, occupational therapists, speech-language pathologists, audiologists) who can furnish telehealth services is extended.
• Audio-Only Telehealth: Coverage for audio-only telehealth services for certain non-mental health services remains extended through 2024.
• Direct Supervision: The ability to meet direct supervision requirements through virtual presence is extended.

Reversion to Pre-PHE Rules (Expected January 1, 2025, without further legislation):

If Congress does not act to extend or make permanent the remaining temporary flexibilities, as of January 1, 2025, most telehealth services (excluding mental health) will likely revert to the pre-PHE Medicare rules. This would mean:

• Geographic Restriction: Beneficiaries must generally be located in a rural HPSA.
• Originating Site Restriction: Beneficiaries must be at an approved originating site (e.g., physician's office, hospital, RHC), and the home would no longer be an eligible originating site for most services.

Key Considerations for Healthcare Businesses

Understanding these nuances is critical for compliance and strategic planning. Providers must differentiate between permanent flexibilities, temporary extensions, and those set to expire. The distinction between mental health services and other medical services is particularly important, as mental health has received more enduring telehealth flexibilities.

Billing and Documentation

Accurate billing requires careful attention to place of service (POS) codes and modifiers. During the PHE, CMS instructed providers to use POS code 10 (Telehealth Provided in Patient's Home) or POS code 02 (Telehealth Provided Other Than in Patient's Home) with modifier 95 (Synchronous Telemedicine Service Rendered Via a Real-Time Interactive Audio and Video Telecommunications System). Providers must ensure their billing systems are updated to reflect current CMS guidance, especially as policies evolve.

Documentation must clearly support the medical necessity of the telehealth service, the modality used (audio-visual or audio-only), and the patient's location and originating site, to justify reimbursement under the applicable rules.

Monitoring Legislative Developments

The future of many telehealth flexibilities beyond 2024 hinges on legislative action. Healthcare businesses should closely monitor congressional activity and CMS announcements. Organizations like the American Telemedicine Association (ATA) and various medical societies are actively advocating for permanent extensions of telehealth flexibilities, citing the benefits of increased access and convenience for patients.

Conclusion

CMS telehealth reimbursement policies regarding geographic and originating site restrictions for Medicare beneficiaries are complex and subject to ongoing change. While the PHE brought about significant expansions, a careful return to more restrictive policies is anticipated for many services starting in 2025, particularly for non-mental health care. Providers must remain vigilant, understand the specific rules for the services they offer, and prepare for potential shifts in reimbursement eligibility to ensure continued compliance and sustainable operations.

Source:

• Centers for Medicare & Medicaid Services (CMS) – Telehealth Services: https://www.cms.gov/medicare/medicare-general-information/telehealth
• Centers for Medicare & Medicaid Services (CMS) – Medicare Telehealth Flexibilities: https://www.cms.gov/newsroom/fact-sheets/medicare-telehealth-flexibilities