Telehealth Billing Rules Every Practice Should Know in 2026

Telehealth billing rules have changed nearly every year since 2020, and 2026 is no exception. Between expiring federal flexibilities, state-by-state licensure rules, and payer-specific modifier requirements, practices that don't stay current risk a steady drip of denials on virtual visits.

The Federal Flexibility Landscape

Since the end of the COVID-19 public health emergency, Medicare telehealth flexibilities have been extended multiple times through short-term legislative action rather than made permanent, creating a recurring cycle of expiration deadlines and last-minute extensions. Key flexibilities that remain subject to this cycle include geographic and originating site restrictions (normally telehealth is restricted to patients in rural areas presenting from a healthcare facility, not home), and expanded provider eligibility for telehealth services.

Practices billing Medicare telehealth need a process for tracking these deadlines, because when a flexibility lapses without extension, claims for services that were billable under the flexibility become non-billable or require a different billing approach (such as an in-person visit requirement) virtually overnight. Relying on clearinghouse rejections to discover a flexibility has lapsed means a period of claims that may never be paid.

Place of Service and Modifier Requirements

Telehealth claims require correct combinations of place-of-service (POS) codes and modifiers, and the rules differ by payer:

• POS 02 (telehealth provided other than in patient's home) and POS 10 (telehealth provided in patient's home) were introduced to give payers more granularity, but adoption varies, some commercial payers still expect the POS code that reflects where the service would have occurred in person, with modifier 95 indicating synchronous telehealth.
• Modifier 95 indicates a synchronous telemedicine service rendered via real-time audio and video, and remains the most widely required modifier across commercial payers.
• Modifier GT (interactive audio and video telecommunication) is still required by some Medicaid programs even though Medicare phased it out in favor of modifier 95 and POS codes.
• Audio-only codes exist for specific services (notably behavioral health and some E/M visits), but billing an audio-only visit under a code or modifier intended for audio-video service is an increasingly common audit finding.

Because these combinations vary by payer and even by state Medicaid program, a one-size-fits-all telehealth billing template is one of the most common sources of telehealth denials. Payer-specific edit rules, reviewed and updated regularly, are essential.

State Licensure and Interstate Practice

Telehealth billing is contingent on the provider being appropriately licensed for the patient's location at the time of service, not the provider's location. Multi-state telehealth programs need to track, for every visit, both the rendering provider's licensure status in the patient's state and whether that state's Medicaid program or commercial payers recognize the specific telehealth modality used.

Interstate licensure compacts (such as the Interstate Medical Licensure Compact) have expanded the number of states where streamlined cross-state licensure is available, but compact membership doesn't guarantee payer recognition, a claim can be billed by an appropriately licensed provider and still be denied if the payer's telehealth policy for that state doesn't cover the service rendered.

Behavioral Health Telehealth Rules

Behavioral health telehealth has its own rule set, generally more permanent than general medical telehealth flexibilities, reflecting recognition of telehealth's effectiveness for mental health services. However, Medicare's behavioral health telehealth coverage includes an in-person visit requirement within a defined period before and periodically during a course of telehealth treatment for certain services, a requirement that's easy to overlook in scheduling workflows and that, if missed, can affect billability of subsequent telehealth visits.

What Practices Should Do

1. Maintain a payer-by-payer telehealth billing matrix documenting required POS codes, modifiers, and any service restrictions, reviewed quarterly, since payer telehealth policies change frequently.
2. Track federal flexibility expiration dates and have a contingency plan (in-person scheduling, alternative billing codes) ready if a flexibility lapses.
3. Verify provider licensure against patient location at scheduling, not just at billing, catching a licensure mismatch before the visit prevents both a compliance issue and an unbillable claim.
4. Build in-person visit requirement tracking for behavioral health telehealth patients, flagging when an in-person visit is due to maintain telehealth billing eligibility.

The Bottom Line

Telehealth remains one of the more volatile areas of billing policy, and the practices that handle it best treat it as a continuously monitored compliance area rather than a one-time setup. A telehealth billing matrix that was accurate in January can easily be out of date by mid-year given how frequently payer policies and federal flexibilities shift.