Last Updated: February 09, 2022

Telemedicine Regulations: Guidelines, Restrictions, and Laws Surrounding Telemedicine message: Let us do the work for you. Answer a few short questions & get cost estimates for your needs from trusted telemedicine software companies who service your area. Our service is 100% free!

As a relatively new healthcare service, telemedicine undergoes relatively frequent changes in the guidelines and regulations surrounding it. Keeping up with these changes presents a challenge, as each state's legislature addresses the practice in its own way. The Federation of State Medical Boards provides a state-by-state guide regarding requirements for telemedicine providers, including reimbursement information and links to state statute and regulations. All 50 states, as well as Washington, D.C., Puerto Rico, the Virgin Islands, and Guam have either regulations on the books or bills awaiting legislative approval. Regulations delineate reimbursement policies for both private insurance and Medicaid. In addition, they may address cross-state licensing, online prescriptions, and telemedicine provider credentials.

State Licensure Requirements

The remote nature of telehealth services means that the patient and the provider may be in two different states. In these instances, the patient's location is considered the place of service. Therefore, the licensing regulations of that state apply and the telemedicine provider must adhere to them. In 48 states plus Washington, D.C., physicians must be licensed to practice medicine in whatever state the patient is located. That means that if you live and practice in California but provide telehealth services to other states, you must also have a medical license to practice in those other states.

There are alternative means of practicing telemedicine across state lines. These include:

  • Cross-state licensing/Reciprocity: Allows providers to offer telehealth services in neighboring states despite not having a medical license in those states.
  • Licensure by endorsement: State boards may grant a license to physicians who are licensed in states with equivalent standards. Applicant requirements may include specific documentation or qualifications, which varies by state.
  • Mutual recognition: Licensing authorities in multiple states may legally agree to shared standards of professional conduct, policies, and processes.

Emergency situations are often considered an exception to state licensure requirements. Again, this varies by state. However, even if you enjoy cross-state licensing, you may face additional restrictions when prescribing medications.

Telehealth and Prescribing Medications

State regulations define how physicians write prescriptions, requiring an established relationship between patient and provider. Typically, this relationship is established once a physician performs an examination, diagnoses the patient, provides treatment, or provides follow-up care. State medical and pharmacy boards vary, but most require at least one in-office visit before determining that a patient-provider relationship exists. Many states also expressly forbid prescribing or dispensing medication via telehealth means, including online consultations, phone calls, questionnaires, and email.

As telemedicine continues to grow, some states have begun expanding these policies. The Center for Connected Health Policy provides regulations for each state as regards telehealth policy. Simply click on the relevant state to view all current laws and regulations. Or, you may use the filter option to choose the area of law you wish, such as "Online Prescribing."

Reimbursement for Telemedicine Services

States also dictate reimbursement for telemedicine services, including private insurance and Medicaid. The federal program Medicare also offers guidelines regarding which services are covered (under Medicare Part B), eligibility, costs, and providers, as well as restrictions. Reimbursement policies under all third-party payers continue to evolve, typically allowing for fewer restrictions as telehealth services become more common.

Medicare Telemedicine Reimbursement Guidelines

Medicare includes telehealth coverage under its Part B umbrella (Medicare Advantage also provides the same coverages as Parts A and B). Currently, Medicare covers live chats that use real-time audio and video, with the goal being to provide medical services for beneficiaries unable to complete an in-office visit due to living in a Health Professional Shortage Area (as defined by Medicare). Costs to the patient are the same as with other Part B services (in 2017: 80 percent covered by Medicare, 20 percent by the patient). Currently, store and forward services are only covered in Alaska and Hawaii.

Medicaid Telemedicine Reimbursement Guidelines

Reimbursement and coverage under Medicaid varies by state, as each state runs its own Medicaid program. According to the Center for Connected Health Policy, 48 states plus Washington, D.C. offer reimbursement for live video consultations through Medicaid. CCHP's report also includes information on how state regulations change year over year, pointing out that more states are covering more services and placing fewer restrictions on telemedicine providers. For example, from August 2016 to March 2017, the number of states that cover store and forward increased by one for a total of 13, while states limiting originating facility sites decreased by two for a total of 23.

Other signs that telemedicine is growing in acceptance include:

  • Geographic restrictions, such as with the Medicare program, dropped to six states
  • One more state began offering transmission and facility fee reimbursement, for a total of 31 states
  • Three more states began covering remote patient monitoring, for a total of 22 states

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Private Payer Telemedicine Reimbursement Guidelines

Though federal law does not require private payer insurance plans to cover telemedicine services, 34 states plus Washington, D.C. have addressed these insurers. Guidelines vary, with some states only requiring some level of reimbursement and others specifically stating that reimbursement for telehealth services must match that of in-office care.

At the same time, some private insurance companies have expanded coverage beyond state regulations (they only have to meet the minimum requirements). This is due in part to customer demand and in part out of recognition that patients who are proactive about their health are less expensive to insure that those with untreated chronic conditions.

Direct-Pay Patient Reimbursement

Many telemedicine providers charge patients directly for services via per-visit fees or subscriptions (typically paid yearly or monthly). This is an especially popular option for patients who have high-deductible insurance plans. Some providers also charge a convenience or service fee for telemedicine services.

Telemedicine Provider Credentialing and Privileging

The American Medical Association offers guidelines around credentialing and privileging of telemedicine providers, with most states and hospitals adopting these recommendations. Specifically, these guidelines recommend eliminating dual privileging, stating that it now only needs to come from "originating site hospitals." Eliminating this encumbrance allows greater access to patients and simpler agreements between providers and hospitals.

As telehealth services grow in popularity, and as governing boards see evidence of their value and effectiveness in treating patients, guidelines will continue to evolve.

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