Telehealth Reimbursement 2026: What Providers Need to Know

When providers think about billing problems, they usually think about denied claims, and that makes sense because a denial is visible. It shows up in the system, someone has to act on it, and there is at least a chance it gets corrected.

But the more costly and more common problem in telehealth reimbursement is not the denial. It is the claim that processes and pays, just at a lower rate than it should, with nothing to flag it as wrong.

This kind of underpayment is almost impossible to catch unless you are actively comparing what you received against what you were supposed to receive, which most practices do not do routinely.

The result is that a practice can be running what looks like a healthy telehealth program, with claims going out and payments coming in, while losing a meaningful amount of revenue every single week on visits that were billed correctly in almost every way except one small detail that the payer used to justify a lower rate.

Understanding where that detail tends to go wrong is the first step to stopping it.

The second thing worth knowing upfront is that the 2026 rule changes from CMS are genuinely significant for some practices, not because they make billing harder but because they opened up billing opportunities that many practices have not yet acted on.

Services that used to have strict frequency limits can now be billed more often.

Visit types that were previously excluded from telehealth coverage are now included.

Providers who have not looked at the updated rules are almost certainly missing revenue that is already sitting there, attached to work they are already doing. Both of those things, fixing the losses and capturing the new opportunities, are what this blog covers.

Why You Are Probably Being Underpaid On Home-Based Visits

The single most common source of telehealth underpayment comes down to a two-digit code called the place of service code, and the reason it matters is something most providers were never explicitly told.

When you bill Medicare for a telehealth visit, one of the things you have to specify is where the patient was sitting during the call. Not where you were. Where they were.

Medicare telehealth reimbursement uses POS 10 for visits where the patient was at home, and POS 02 for visits where the patient was somewhere other than home, like a clinic, workplace, or any other non-residential location.

The reason this distinction affects your payment is that Medicare calculates telehealth reimbursement rates differently depending on which code applies.

POS 10 triggers what Medicare calls the non-facility rate, which in most cases is higher than what POS 02 produces.

Here is what makes this particularly easy to miss: using the wrong code does not produce a denial. It produces a payment, just a smaller one, and because the payment comes through without an error message, there is nothing in the normal billing workflow to catch it.

A practice that has been defaulting to POS 02 for all telehealth visits, which is common because POS 02 was the standard telehealth code before pandemic-era billing became normalized, is receiving less than it is owed on every single home-based visit, and the remittance reports look completely fine.

The reason POS errors are so persistent is that the patient’s location is not being captured anywhere in the visit workflow, so when the claim is being built, the biller has to guess or default to habit.

The fix is as simple as adding one question to your telehealth check-in process. Before every visit, whoever is checking the patient in asks where they are calling from and records the answer. That answer flows into the claim as the correct POS code, and the underpayment problem stops.

Practices that implement this and then go back and look at six months of prior claims frequently find that the rate difference across hundreds of visits adds up to a number that is hard to look at.

The place of service code also matters because it is connected to telehealth modifiers, which are the small codes you add to a claim to flag that the visit happened remotely. Understanding proper telemedicine billing and coding means recognizing that a lot of billing teams treat the modifier as the critical telehealth billing detail, but the modifier only does its job when the rest of the claim, including the POS code, is accurate. A modifier on a claim with the wrong POS does not rescue the payment. It just adds a second thing the payer can point to when explaining why the rate was calculated the way it was.

Audio-Only Behavioral Health Visits: Billable, But Almost Never Documented Right

There is a widespread assumption among behavioral health providers that if a patient calls in by phone instead of joining a video session, the visit cannot be billed. Some practices do not submit claims for those visits at all.

Others write them off as a courtesy. Both responses are leaving real money uncollected, because Medicare explicitly allows audio-only billing for mental health and behavioral health under specific conditions, and those conditions are met by a large share of behavioral health patients on a regular basis.

The conditions are straightforward.

The patient needs to be at home during the call, and video needs to have been either not technically available to them or something the patient chose not to use.

• A patient without reliable internet qualifies.
• A patient calling from a room they share with other people, where a video call would not be private, qualifies.
• A patient who simply prefers talking by phone and has expressed that preference qualifies.

These are not unusual situations in behavioral health. They describe a significant portion of the patient population that many practices serve every day, and the visits with those patients are fully billable under Medicare when the documentation reflects the circumstances.

The documentation is where almost every audio-only claim problem originates. It is not that providers are trying to bill for visits that do not qualify. It is that the chart note from a phone visit typically says nothing specific about the modality or the patient’s situation, because the documentation template was built for video visits and nobody ever updated it for audio-only.

When a payer reviews one of those claims, they are looking for three specific things:

• Confirmation that the patient was at home
• A notation that the visit was audio-only, and
• A brief explanation of why there was no video.

If none of those things appear in the note, the claim gets flagged on audit and often clawed back, even when the visit itself was completely appropriate and the telehealth CPT codes were correct.

Updating a documentation template to prompt for those three things takes a few minutes. Once it is in place, every audio-only note automatically captures what the payer needs to see, and the risk of a claw-back on a legitimate visit drops to almost nothing.

The practices that have done this and then looked at their prior audio-only claims often find a pattern of valid visits that were billed correctly but documented in a way that made them look like they were not.

For Medicaid patients, audio-only billing gets more complicated because telehealth insurance reimbursement rules vary by state and, within each state, by managed care plan.

A state Medicaid office might explicitly allow audio-only billing for behavioral health, but a managed care organization operating under that state’s Medicaid contract can set its own more restrictive policy on top of that.

So it is entirely possible for the same type of visit to be covered under the state policy and denied by a specific plan in that same state, and this is not a rare exception.

It is a routine source of denials for behavioral health practices that see Medicaid patients across multiple managed care plans.

Verifying audio-only coverage at the plan level, not just the state level, is the only way to know for certain what will actually get paid.

The Medicaid Document You Are Checking is Probably Not the One That Governs Payment

This is the Medicaid issue that catches the most practices off guard, and it stems from a reasonable but incorrect assumption about how Medicaid works.

When a provider wants to know whether a telehealth service is covered for a Medicaid patient, the natural thing to do is check the state Medicaid telehealth policy. That policy document describes what the state’s Medicaid program covers, and it is usually publicly available and fairly easy to find.

The problem is that for the majority of Medicaid patients, the state policy is not what actually governs their coverage.

Most Medicaid patients are enrolled in managed care organizations, which are private insurance companies that states contract with to administer their Medicaid programs.

Those managed care organizations have their own contracts with providers and their own telehealth reimbursement policies, and those policies are negotiated separately from the state Medicaid policy.

Under federal rules, managed care plans cannot cover less than what federal Medicaid requires, but they can cover less than what the state’s own Medicaid policy allows, and they frequently do.

The result is that a service can be clearly covered in the state Medicaid telehealth policy and still be denied by a managed care plan operating under that same state program, because the plan has drawn its own lines around what it will reimburse.

This creates a situation where checking the state policy gives you a false sense of security. You confirm the service is covered, you bill it, the claim gets denied, and the denial reason points to the plan’s internal policy rather than anything in the state’s published rules.

This happens routinely in practices that see Medicaid patients across multiple managed care plans, and the only way around it is to verify coverage at the plan level for each managed care organization you work with, which means getting the actual telehealth policy document from each plan and comparing it to what you are billing.

That verification also needs to happen periodically rather than once, because managed care contracts renew and telehealth policies within them change, sometimes without any formal notice to providers.

The broader issue with Medicaid is that variation goes deeper than most providers expect. It is not just that states differ on whether telehealth is covered.

Within a single state, the covered services, the eligible provider types, the allowed locations, and the payment rates can all be set differently depending on the plan and the contract.

A psychiatrist billing telehealth under one managed care plan may operate under completely different rules than a social worker billing the same visit type under a different plan in the same state.

Treating Medicaid as a uniform system with state-level rules is the assumption that produces the most persistent and hardest-to-diagnose billing problems in telehealth.

New Jersey’s Parity Deadline And What the Commercial Rate Question Looks Like Everywhere Else

Commercial insurance adds a different kind of complexity to telehealth billing guidelines because the rate you get paid for a telehealth visit is not just a function of what you billed. It depends on whether your state requires commercial insurers to pay the same rate for telehealth as they do for in-person visits, and on what your specific contract with each payer actually says.

In states with strong telehealth parity laws, providers can count on telehealth rates matching in-person rates for the same services. In states without those laws, payers are free to set lower telehealth rates in their contracts, and many do.

New Jersey is a particularly important example right now because the state’s current parity requirement, which mandates that commercial plans reimburse covered telehealth services at the same rate as in-person services, expires on July 1, 2026.

If the state legislature does not extend it before that date, commercial plans in New Jersey will be legally free to begin paying lower rates for telehealth in the second half of the year.

For providers in New Jersey whose telehealth volume is significant, this is not an abstract policy issue. It is a specific date after which revenue from commercial telehealth could decrease, and the time to understand what that means for the practice’s finances is before July, not after the first set of remittances comes back at a lower rate and nobody knows why.

Even outside New Jersey, and even in states with active parity laws, the rate question is worth checking directly rather than assuming.

Parity laws vary in what they actually require: some mandate rate parity, meaning the same dollar amount for the same service. Others require only coverage parity, meaning the service must be covered but the rate can still differ.

Many parity laws apply only to fully insured plans and not to self-funded employer plans, which are governed by federal ERISA rules rather than state insurance law. A practice in a parity state whose patients are mostly on self-funded employer plans may have far less rate protection than it thinks.

The simplest check is to pull the telehealth rate and the in-person rate for the same telehealth CPT codes from the fee schedule of each major commercial payer and compare them side by side.

If there is a gap that the parity law should be closing, that is worth raising directly with the payer as a contract conversation. If there is a gap in a state without parity protections, knowing its size helps the practice make informed decisions about telehealth volume rather than discovering the discrepancy buried in a remittance report months after the fact.

The 2026 Rule Changes That Most Practices Have Not Acted On Yet

The CMS telehealth guidelines for 2026 are worth going through specifically rather than generally, because the ones that matter most for practice revenue are the kind that do not make headlines but quietly create billing opportunities for providers who know to look for them.

The most significant change for many practices is the permanent removal of frequency restrictions on certain telehealth service types.

Before 2026, there were hard limits on how often some telehealth visit types could be billed, even when the clinical situation clearly warranted more visits. Those limits have now been removed for specific categories, including certain subsequent visit codes for patients in inpatient and nursing facility settings and certain critical care consultation codes.

For practices that see patients in those settings via telehealth, this means visit types that previously hit a billing ceiling can now be billed as often as clinically appropriate.

If your billing process was built around the old frequency limits and nobody updated it after the 2026 rule took effect, you may be capping your own billing on visits where no cap is required anymore.

Checking the current CMS telehealth services list against what your practice actually bills, specifically looking for service types with removed frequency limits, is a straightforward way to find revenue that is already attached to work you are doing.

The other significant change is the recognition of virtual direct supervision for selected services when both audio and video are live during the session.

Direct supervision previously required the supervising provider to be physically present in the same location as the clinical staff member performing the service.

That requirement has been relaxed for certain services, meaning practices can now deliver some supervised services via telehealth that previously required the supervisor to be on-site.

This is particularly relevant for practices that use supervised clinical staff across multiple locations, because it removes a logistical constraint that was limiting how those practices could structure their telehealth delivery.

What To Do, In The Order That Recovers Money Fastest

• Pull the last 90 days of telehealth claims and compare your telehealth reimbursement rates against your in-person rates for the same CPT codes, payer by payer, because if POS 02 has been used instead of POS 10 for home-based visits, the gap will show up here and tell you exactly how much has been left on the table across every affected claim.

• Add patient location to your telehealth check-in so that before every visit, the patient confirms whether they are at home or somewhere else, and that answer flows directly into the POS code on the claim rather than being filled in by the biller from habit or assumption.

• Update your behavioral health documentation template to prompt for patient location, modality, and a brief reason video was not used on every audio-only visit, because those three elements are exactly what payers look for on audit and their absence is what turns a legitimate claim into a claw-back.

• Get the telehealth coverage policy document from each Medicaid managed care plan you bill and compare it against what you are actually submitting, paying particular attention to any service types where the plan policy is more restrictive than the state Medicaid policy, since that gap is where the most common and least visible Medicaid denials come from.

• If you are in New Jersey, model your commercial telehealth revenue under a scenario where parity expires on July 1, 2026 and rates drop to whatever your contract allows without the parity requirement, so that if the legislature does not extend the law you already know what it means for your numbers and are not making reactive decisions in the middle of a billing cycle.

• Review the updated CMS telehealth services list specifically for service types that had frequency restrictions removed in 2026, and check whether those apply to visits your practice is already doing, because this is the most direct way to add billing revenue without adding any clinical work or changing any existing processes.

• Set a monthly reminder to review a random sample of about 10 percent of telehealth claims as part of your broader telehealth revenue cycle management process, checking that the POS code, modifier, and documentation basics are all present and correct, because the errors that cost the most money in telehealth reimbursement are almost always systematic rather than random, and catching them after one month costs a fraction of what catching them after six months does.

Frequently Asked Questions

My telehealth claims are getting paid, so how would I know if I am being underpaid?

A paid claim and a correctly paid claim are not the same thing, and the difference is only visible if you compare what you received against what you should have received for each service under each payer. The most common source of quiet underpayment is the POS code: if POS 02 is being used for visits where the patient was at home, the claim pays at a lower rate and nothing flags it as an error. Pulling your telehealth reimbursement rates and your in-person rates for the same CPT codes from your fee schedule and comparing them side by side is the quickest way to see whether a gap exists.

What exactly does Medicare need in the chart note to pay an audio-only behavioral health visit?

Three things that need to be explicitly present in the note: confirmation that the patient was at home during the visit, a statement that the modality was audio-only rather than video, and a brief explanation of why video was not used, whether the patient lacked access to it, did not have a private space, or chose not to use it. None of those need to be lengthy, but all three need to be present, because a reviewer treating their absence as equivalent to the visit not meeting the criteria is exactly what produces claw-backs on visits that were clinically appropriate and correctly billed. Meeting telehealth billing requirements at the documentation level is just as important as using the correct codes.

Why would a Medicaid telehealth claim get denied when the state policy says it is covered?

Because the state Medicaid policy and the managed care plan policy are different documents, and the managed care plan policy is what governs payment for most Medicaid patients. Managed care plans can set coverage rules that are more restrictive than the state’s own policy, and they frequently do. Confirming coverage with the state Medicaid office tells you what the maximum allowed coverage is. It does not tell you what a specific managed care plan will actually reimburse, which is why plan-level verification is the only reliable check.

What is the New Jersey parity deadline and what happens if it expires?

New Jersey currently requires commercial insurance plans to reimburse covered telehealth insurance reimbursement at the same rate as in-person services. That requirement expires on July 1, 2026. If the state does not extend it, commercial plans in New Jersey will be free to pay lower rates for telehealth after that date, with the exact rate determined by individual payer contracts rather than a state mandate. The practical impact depends on how much of a practice’s revenue comes from commercial telehealth and what the contracted telehealth rates look like without the parity floor.

What specific services can now be billed more often under the 2026 CMS changes?

CMS permanently removed frequency restrictions on certain subsequent visit codes for patients in inpatient and nursing facility settings and on certain critical care consultation codes. These service types previously had hard billing limits that applied regardless of clinical need. Those limits no longer exist for the affected codes, meaning they can now be billed as often as clinically appropriate. The exact list is in the 2026 CMS telehealth services document, and comparing it against your current billing process is the most direct way to identify whether any of the changes apply to visits your practice is already doing.

What is the difference between the place of service code and the telehealth modifier, and does the order they are applied matter?

The place of service code tells Medicare where the patient was, which affects the payment rate. The telehealth modifier tells Medicare the visit happened remotely, which identifies it as a telehealth claim. Both are required under standard telehealth billing requirements, and they serve different purposes. The order does not matter, but their accuracy relative to each other does: a modifier on a claim with the wrong POS code does not fix the rate problem, it just means the claim has two things that are inconsistent with each other, which payers can use to justify processing at the lower rate.

How do I know whether my state’s parity law actually covers all my commercial patients?

Most state parity laws apply only to fully insured plans, meaning plans where the employer purchases coverage from an insurance company. They generally do not apply to self-funded plans, where the employer pays claims directly and simply uses an insurance company for administration. Self-funded plans are governed by federal ERISA law rather than state insurance law, which means state parity requirements do not reach them. If a significant portion of your commercially insured patients are on employer plans from large companies, there is a good chance many of those plans are self-funded and outside your state’s parity protection, regardless of how strong that protection is.

Is a monthly claim audit actually worth the time for a small practice?

For most practices, yes, specifically because the errors that cost the most money in telehealth reimbursement tend to be systematic rather than random. A single wrong default in the billing workflow can affect every claim it touches, and the longer it runs undetected the more expensive it becomes to recover from. Reviewing 10 percent of claims once a month takes under an hour in most practices and catches those systematic errors while they are still small. Strong telehealth revenue cycle management means building that habit in before problems compound. The alternative, discovering six months of the same mistake at once, is both more expensive and harder to correct because many payers have strict timelines for claim corrections and appeals.

Do I need different billing codes for telehealth versus in-person visits?

Generally no. The same CPT codes that apply to in-person visits apply to telehealth visits of the same type. What changes is the place of service code, the telehealth modifier, and the need to confirm that the specific service is on the payer’s covered telehealth list. Understanding telemedicine billing and coding comes down to recognizing that the visit code itself stays the same. The context codes around it are what make it a telehealth claim and what the payer uses to determine the applicable rate.

What is the fastest way to find out if my practice has a systematic billing error right now?

Pull the last 90 days of telehealth claims, filter by denial reason, and look for whatever denial reason appears most often. A denial reason that shows up across many claims is almost always a workflow issue rather than a series of individual mistakes, and identifying it takes minutes. For underpayment rather than denials, the equivalent check is comparing telehealth rates against in-person rates for the same CPT codes across your major payers. Either check takes less than an hour and, in most practices, surfaces at least one thing that has been quietly costing money for longer than anyone realized.