Telehealth at the Crossroads

Medicare telehealth went from a marginal, geography-bound benefit covering a narrow list of services to a program processing tens of millions of visits annually between March 2020 and the end of the COVID public health emergency. The expansion happened through emergency waivers, not permanent legislation. Every expansion since then has been temporary, attached to continuing resolutions and year-end packages, subject to lapse whenever Congress fails to act. The flexibilities now run through December 31, 2027, secured in the Consolidated Appropriations Act of 2026 after a 43-day government shutdown that interrupted telehealth coverage entirely in late 2025. Whether any of this becomes permanent law, what permanence would require, and who bears the risk of the next lapse is what this article examines.

The Extension Cycle and What It Has Cost

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Section 1834(m) of the Social Security Act is the statutory foundation for Medicare telehealth payment. As originally written, it restricts telehealth coverage to beneficiaries in rural originating sites, limits eligible provider types, and requires an in-person originating site rather than a patient’s home. The COVID emergency authority allowed CMS to waive these restrictions administratively. Making any of them permanent requires an act of Congress amending section 1834(m) directly. No executive order, no CMS rule, and no CMMI model can do it.

Congress has amended 1834(m) incrementally since 2020, making some flexibilities permanent while leaving others on temporary extension tracks. What is now permanent includes the removal of geographic and originating site restrictions for behavioral health telehealth, the authorization of audio-only technology as a permanent modality for behavioral health when patients are unable to use video, the permanent eligibility of marriage and family therapists and mental health counselors as Medicare distant site providers, and the permanent removal of frequency limits on telehealth-furnished subsequent inpatient and nursing facility visits, finalized in the CY 2026 PFS rule.

What remains temporary includes home as the originating site for non-behavioral health visits, the removal of geographic restrictions for non-behavioral services, expanded provider eligibility for occupational therapists, physical therapists, speech-language pathologists, and audiologists, audio-only modality for non-behavioral health visits, and the ability of Federally Qualified Health Centers and Rural Health Clinics to serve as distant sites for non-behavioral telehealth. All of these are now authorized through December 31, 2027, under the Consolidated Appropriations Act of 2026.

The cost of the extension cycle is not abstract. When telehealth flexibilities lapsed on October 1, 2025, at the start of the federal fiscal year without a continuing resolution in place, Medicare beneficiaries lost access to telehealth services during the 43-day shutdown. A Brown University policy brief documented a 24% drop in telehealth utilization in the first 17 days of the lapse, with individual states including Florida, Louisiana, and New York seeing drops of 40% or more. CMS instructed Medicare Administrative Contractors to return telehealth claims pending congressional action, creating a retroactive reprocessing burden for providers when the CR passed November 12. Physical therapists, occupational therapists, speech-language pathologists, and audiologists who lacked even the retroactive protection under the CR lost their ability to furnish Medicare telehealth services after January 31, 2026, until the Consolidated Appropriations Act of 2026 secured the December 2027 extension.

The capital investment problem that permanent uncertainty creates is documented in provider and health system behavior. Health systems and multi-site practices that would invest in telehealth platforms, hire telehealth-specific staff, and develop clinical workflows around telehealth-first care models have consistently cited the temporary authority structure as a barrier to investment. The calculation is straightforward: building an infrastructure on a program that may not exist in 14 months is a worse allocation of capital than building it on something with permanent statutory authority. The result is that the clinical and operational potential of telehealth in Medicare is being realized more slowly than it would be under permanent law.

Audio-Only Telehealth: Access and Fraud in Tension

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Audio-only telehealth is the provision that concentrates the equity dimension of the permanence debate most sharply. The beneficiaries who depend on audio-only are not distributed randomly across the Medicare population. They are older, sicker, more likely to live in rural areas with limited broadband, and more likely to be in the demographic cohorts with lower rates of device ownership and digital literacy. The population profile of audio-only users is, in significant measure, the population Medicare was designed to serve.

CMS permanently authorized audio-only for behavioral health visits when patients are unable to use or decline video. For non-behavioral health visits, audio-only remains on the temporary extension track through December 2027. The practical effect of losing audio-only authorization for non-behavioral services is not that affected beneficiaries switch to video telehealth. Most of them cannot. The practical effect is that they lose telehealth access entirely, reverting to in-person care that may be geographically, physically, or logistically inaccessible.

The OIG has documented the fraud tension. Audio-only visits can be exploited: billing for services not delivered, conducting minimal clinical interactions billed as full evaluation and management visits, and routing high-volume billing through audio-only encounters with little clinical substance. The absence of video creates a verification gap that post-payment review catches only imperfectly. OIG findings on audio-only telehealth billing patterns have documented outlier providers with implausible visit volumes and encounter characteristics inconsistent with legitimate clinical practice.

The policy design question is how to maintain access for the beneficiaries who need audio-only while controlling for providers who exploit it. The tools available include enhanced billing documentation requirements, targeted auditing of high-volume audio-only billers, prior authorization for audio-only encounters above utilization thresholds, and provider education. None of these requires eliminating audio-only coverage for legitimate encounters. The OIG’s consistent position is that targeted program integrity intervention is preferable to benefit elimination, because elimination removes access from the many to prevent fraud by the few. Whether CMS and Congress operationalize that distinction in permanent legislation remains unresolved.

The Rural-Urban Divide

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Telehealth was sold in part as a solution to rural healthcare access problems. The evidence on whether it has delivered on that premise is more complicated than the advocacy narrative suggests.

FCC broadband mapping shows that rural areas have substantially lower rates of fixed broadband access than urban areas, with the gap most pronounced for high-speed connections capable of supporting reliable video telehealth. Rural beneficiaries who cannot access reliable broadband face a structural barrier to video telehealth that no amount of telehealth flexibility can overcome. The paradox is precise: the policy designed to solve rural access problems requires an infrastructure that is itself less available in rural areas. Audio-only telehealth is the workaround, which makes the policy threat to audio-only coverage a rural access threat more than it is a general telehealth access threat.

Telehealth utilization data shows urban-rural patterns that are counterintuitive at first but consistent with the infrastructure explanation. Urban beneficiaries use video telehealth at higher rates, in part because broadband penetration is higher, in part because a larger share of the urban beneficiary population has the device ownership and digital literacy that video telehealth requires. Rural beneficiaries have higher rates of audio-only use among those who use telehealth at all, but lower overall telehealth penetration. The beneficiaries for whom telehealth was most urgently needed, those in areas with limited in-person provider supply, are disproportionately the ones for whom the technology infrastructure required to use it is weakest.

Geographic benchmark effects compound this. MA plan availability is lower in rural counties, in part because the payment rates in low-benchmark rural counties make plan entry financially unattractive. Beneficiaries in those counties are more likely to be in FFS Medicare without supplemental benefits. They lack the additional telehealth benefits that MA plans have used as a competitive differentiator. Their telehealth access depends entirely on the statutory and sub-regulatory framework for FFS telehealth. When that framework lapses, they have no fallback.

WISeR’s geographic footprint is relevant here. The six WISeR pilot states include both urban-concentrated markets (New Jersey, Ohio) and states with substantial rural populations (Oklahoma, Texas, Arizona, Washington). FFS beneficiaries in rural parts of those states face WISeR’s prior authorization requirements without the MA plan alternative that urban beneficiaries can choose. The interaction of WISeR and rural FFS coverage is an unexamined policy conjunction.

Specialty Telehealth: Behavioral Health and Beyond

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The behavioral health telehealth framework is the most mature area of permanent Medicare telehealth law. The Consolidated Appropriations Act of 2021 permanently removed geographic and originating site restrictions for behavioral health, establishing home as a permanent originating site for mental health services regardless of where the beneficiary lives. The CY 2022 PFS codified these provisions, and subsequent rules have added provider types and modified in-person visit requirements. The result is that behavioral health telehealth in Medicare has a statutory foundation that non-behavioral telehealth lacks.

The current temporary flexibility for behavioral health involves the in-person visit requirement: section 1834(m) as amended requires an in-person visit within six months prior to the first mental health telehealth service, effective after December 31, 2027. The Consolidated Appropriations Act of 2026 extends the waiver of that requirement through December 2027. After 2027, a patient who has not had a recent in-person visit with the billing provider would need to establish that in-person relationship before telehealth mental health services could be reimbursed under Medicare. For beneficiaries in areas with severe shortages of in-person behavioral health providers, the in-person requirement is not a minor administrative condition. It is a substantive access barrier.

The behavioral health telehealth cliff after 2027 is a specific, date-certain policy risk. The populations most dependent on behavioral health telehealth, including rural beneficiaries with no local providers and dual eligible beneficiaries with behavioral health comorbidities, face the most concentrated harm if the in-person requirement reinstatement is not addressed before then.

Remote patient monitoring is the specialty telehealth category with the most active clinical evidence base. RPM in chronic disease management, including heart failure, hypertension, and diabetes, has demonstrated outcomes improvements and cost reductions in peer-reviewed literature. Medicare’s RPM coding and reimbursement framework has evolved through multiple PFS cycles. The interaction between RPM and risk adjustment documentation is relevant: RPM encounters generate coded data that contributes to the encounter-based risk adjustment picture, and any RPM coverage contraction would reduce encounter data in exactly the populations where accurate coding matters most.

Other specialty domains including dermatology, nephrology, and cardiology have developed telehealth-specific clinical protocols and utilization patterns that depend on the current coverage framework. Cardiology organizations including ACC have been active advocates for permanent telehealth authorization, specifically including home-based cardiac rehabilitation and the removal of originating site restrictions that affect post-acute cardiology follow-up. Dermatology’s asynchronous store-and-forward modality, which is covered under the MA supplemental benefit framework but not under FFS telehealth without a geographic waiver, represents another category where temporary authority limits innovation.

MA Telehealth Benefit Design

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MA plans have used telehealth as a supplemental benefit and a competitive differentiator since well before the COVID emergency. The supplemental benefit authority allows MA plans to offer telehealth services beyond the FFS benefit without the statutory constraints that apply to FFS. Plans that built telehealth benefits into their bid strategy during the supplemental benefit expansion years created a member experience around telehealth access that has become a retention tool.

The current MA benefit contraction environment, driven by the rate and risk adjustment pressures documented in Series 2, is squeezing supplemental benefit budgets. Plans that are cutting dental, vision, and over-the-counter benefits are also reducing telehealth supplements. The beneficiary who enrolled in MA partly because of its telehealth benefits may find those benefits reduced or eliminated at renewal without a corresponding improvement in the FFS alternative.

Telehealth encounter documentation in MA also has a risk adjustment dimension. Telehealth visits that generate coded diagnoses contribute to MA risk scores in the same way that in-person encounters do. As MA plans reduce telehealth utilization, the encounter data supporting risk-adjusted diagnoses in the affected member population may decline, with downstream effects on both the risk score for those members and the encounter-based risk adjustment picture that CMS is building toward.

The Legislative Landscape for Permanence

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The path to permanent Medicare telehealth requires a bill amending section 1834(m) to pass both chambers and be signed into law. The Consolidated Appropriations Act of 2026 extended current flexibilities through December 2027, which reduces the immediate pressure but does not eliminate the need for permanent legislation before the next cliff.

The legislative vehicle options are limited. Budget reconciliation is closed for the 119th Congress. A standalone telehealth permanence bill requires 60 votes in the Senate, which means meaningful bipartisan support. The CONNECT for Health Act and the Telehealth Modernization Act both have bipartisan sponsors and have been introduced in multiple prior Congresses without passing. A government funding package in late 2026 or early 2027 could carry telehealth provisions, repeating the cycle of attaching permanence or extension to must-pass legislation. That is the mechanism that produced the 2027 extension, and it is likely the mechanism that produces whatever comes next.

The CBO score for permanent telehealth is material to the political feasibility calculation. Permanent authorization of the full suite of current flexibilities carries a federal spending cost estimate that has consistently exceeded what deficit-concerned members are willing to accept in the context of other competing priorities. The scoring dynamics mean that permanent authorization of a subset of flexibilities is more politically viable than comprehensive permanence. Behavioral health telehealth is already largely permanent and therefore off the table as a cost driver. Audio-only and home originating site for non-behavioral visits are the high-utilization provisions that carry the largest CBO score.

The political coalition for telehealth permanence is broad but not uniform in its priorities. Provider organizations want permanent authority for the full current flexibility set and push back on any tiered or partial permanence approach that preserves some provisions while sunsetting others. Beneficiary advocates focus most intensively on audio-only and rural access provisions. Plans are primarily interested in the supplemental benefit and encounter data implications of FFS telehealth policy rather than the permanence question directly. Deficit hawks treat the CBO score as a ceiling regardless of the clinical evidence. The coalition’s breadth means that any partial permanence bill will face objections from stakeholders who want more, and any comprehensive bill will face objections from stakeholders concerned about cost.

The most realistic path to permanence in the 119th Congress runs through a 2026 or 2027 year-end legislative package that either locks in a subset of the most clinically supported and least costly flexibilities permanently while extending others, or provides a longer-duration extension with a specific permanence sunset that forces the issue in the next Congress. Neither outcome is telehealth permanence as advocates have defined it. Both are progress toward it.

Related Reading

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MCR-05_13 Rural Medicare: Critical Access Hospitals, Ground Ambulance, and the Geographic Equity Problem MCR-08_01 Behavioral Health Coverage Reform: MA Cost-Sharing Caps, New Provider Types, and the Telehealth Permanence Question MCR-06_01 The HealthTech Policy Opening: ACCESS, WISeR, and the Digital Medicare Moment