How Value-based Care Is Changing Telehealth Payment Models

healthcare payment and reimbursement

“How are payers reimbursing for telehealth services?” “What is the strategy on billing for telehealth?” These are some common questions we hear from those starting or expanding their telehealth services.  There are a variety of telehealth payment models available to health providers; some involve reimbursement while others generate new revenue streams. Moreover, with the growing emphasis on value-based care these healthcare payment models are sure to be changing. So what kind of telehealth payment strategies will help keep your telehealth services alive?  

How Telehealth Reimbursement Works

Traditionally, reimbursement is the main way healthcare gets paid. This is controlled by Federal and State coverage guidelines that are established by federal Medicare and Medicaid programs rules. The rules contain specific restrictions about the exact cases in which telehealth will and will not be reimbursed:

Medicaid reimburses 100% for telemedicine services using interactive telecommunications equipment that includes, at a minimum audio and video equipment permitting two-way, real time, interactive communication between a recipient and a practitioner.

Medicare provides reimbursement for virtual visits also, just with more restrictions than Medicaid on patient location and types of services covered.

There is no generally accepted standard for private payers; as a result, there is a wide range in the variety of services covered.  Most decisions are made based on the perceived value of the benefits.  Some payers recognize virtual visits to be equal to in-person ones, and reimburse a wide variety of telehealth services.  Others have yet to develop complete policies on telehealth reimbursement, so they require prior approval or deny payments based on the services.

Alternative Telehealth Payment Models

This is where things get interesting. When it comes to getting paid for your telemedicine services, thinking outside the box is the key to success. Government funded fee-for-service payments are becoming outdated as the health system migrates to value-based care philosophies, such as accountable care and bundled payments.  In fact, CMS has established a goal of achieving 50% of reimbursement payments to be generated by these models by 2018.  Successful telemedicine providers and companies understand this shifting healthcare payment landscape and have changed their thinking from “reimbursement” to “revenue.”

Three Revenue Models To Consider

In a recent Telehealth Failures & Secrets To Success talk, telehealth veteran Kristi Henderson emphasize that an overlooked aspect of financing your telehealth program is seeing the big picture view of your overall program and the willingness to change your funding options as you go.

Pursuing strategic business partnerships in lieu of relying on the traditional time and approval barriers of healthcare payers is one smart way to create new revenue streams from your telemedicine services.  Three models providers should consider offering as revenue streams include Institution to Institution, Employee Workforce services, and International Supplemental Services.

The difference between traditional reimbursement and these alternative models are that they are contractual agreements for exchanging services, and promote increased revenues, healthier populations, and more efficiency in delivering healthcare services across the continuum of care.

Get a Deeper Dive with the TFSS Webinar Series

To learn more about telehealth reimbursement and revenue models, join the Telehealth Failures & Secrets To Success Webinar Series for a complimentary webinar on Feb. 24 Mar. 2. This webinar will help healthcare payers and providers learn how telehealth technologies maximize health care quality, outcomes, and costs, while generating new revenue streams.

It will be well worth 45 minutes of your day so please be sure to register for the Feb. 24 Mar. 2 webinar now!

Don’t miss our expert panelists from IMST Telehealth Consulting:

Aneel Irfan IMST Consulting Aneel Irfan, CTC, CTL;  IMST Telehealth Consulting, Founder & CEO

  • Member of the Florida Partnership for Telehealth
  • Certified National School of Applied Telehealth Professional
  • Contributing Editor, Telemedicine Magazine
  • Public Speaker and Telehealth Educator


Heather Zumpano IMST ConsultingHeather Zumpano, MS, CAPM, CTC, CTL, CTCP;  IMST Telehealth Consulting, Co-Founder & Project Director

  • Member of the Florida Partnership for Telehealth
  • Certified National School of Applied Telehealth Professional
  • Master of Science, Health Informatics
  • Certified Associate Project Manager
Comments ( 1 )
  • anne
    William Cardoza says:

    Thank you for this very informative post on telehealth payment methods. Under these payment models mentioned here and with all the details about this, there can be opportunities for telehealth adoption to the extent it encourages efficiencies in the system.

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