Service providers are enjoined to comprehend and adhere to multilevel state legislations and payment policy stipulations when delivering virtual services. From the viewpoint of licensure, it is fundamentally incumbent upon a telehealth provider to acquire licensure in the patient’s host state. Notable deviations exist, such as brief travel allowances, public health urgency concessions, and exceptions for telehealth registrations.

Contrastingly, from a financial stance, reimbursement guidelines laid out by payers for telehealth provisions can be influenced by the geographical location of service providers soliciting their own prerequisites. The succeeding section offers an organized analysis concerning differing payer approaches regarding telehealth provider positioning.



According to Medicare reimbursement guidelines, telehealth providers must be located within the United States in order to receive payment. However, they do not have to be in the same state as the patient, as long as they are following the licensing laws of the state where the patient is located.

Medicare does not cover services that are provided outside of the United States. This means that even if a telehealth provider is appropriately licensed in the state where the patient is located, Medicare will not pay for services if the provider is located outside of the U.S.

The Centers for Medicare & Medicaid Services (CMS) interpret this requirement to apply to telehealth services as well. They consider the location of the practitioner at the distant site to be the site of service for payment purposes, even though licensing authorities may consider the service to be rendered at the patient’s location.

For example, the Office of Inspector General (OIG) of the Department of Health and Human Services has identified a case where a physician residing in Pakistan provided psychiatric counseling services via telehealth to a patient in a rural medical center in the U.S. This service was considered unallowable because it was considered to be “furnished” at the provider’s location outside of the U.S.

It’s important to note that this prohibition on reimbursement for services outside of the U.S. was not lifted during the public health emergency.

CMS’ decision to not reimburse for telehealth services provided by foreign-based providers has faced legal challenges, but no court has ruled on the matter yet. In 2021, RemoteICU, a provider of remote specialist physician services, filed a complaint and injunction motion to prevent CMS from denying Medicare reimbursement for services provided by foreign telehealth providers. However, the U.S. District Court for the District of Columbia denied RemoteICU’s motion because they had not exhausted Medicare’s administrative claims process. RemoteICU appealed to the D.C. Circuit, but the appeal was dismissed due to lack of jurisdiction. It is still possible for a motivated provider to challenge CMS’ position under the appropriate circumstances.



In general, Medicaid programs allow telehealth providers to be located outside of the state as long as they comply with the licensure laws and requirements of the state where the patient is located. However, it is advisable to check with the state Medicaid program as some states may have a registration process for telehealth providers. Each state’s Medicaid program should be reviewed individually to determine the specific requirements for out-of-state providers and whether providers can be located outside of the United States.

It is important to note that even if Medicaid does not explicitly prohibit payments for services rendered from abroad, CMS (Centers for Medicare and Medicaid Services) may refuse to cover its cost-sharing obligation to the state Medicaid program. This means that submitting claims for services performed outside of the country could potentially violate state Medicaid rules, even if Medicaid itself does not address the issue.

As an example, in Texas, out-of-state providers can submit claims to the state’s Medicaid program as long as they are properly licensed. Texas does not specify whether providers can be located outside of the U.S. Similarly, Montana regulations do not state where a provider must be located. However, Montana requires that out-of-state telehealth providers be licensed in Montana and enrolled in the Montana Medicaid program. Any enrolled Montana Medicaid provider can serve as a distant site if telemedicine is within their licensed scope of practice.


Commercial Payors

Commercial payers generally allow telehealth providers to be located out-of-state, and many do not have explicit guidelines on whether providers may be located abroad. However, PacificSource Health Plans explicitly prohibits payment for services rendered by out-of-country providers. Therefore, if providers plan to bill commercial payers for services provided outside the U.S., it is recommended to confirm with those payers if this would be allowed. Additionally, when a commercial payer is acting as a Medicare Advantage plan administrator, they must follow Medicare’s rules regarding payment for services provided outside the United States, even if their own plans would permit payment for such services.



The rules surrounding the submission of claims and the location of telehealth providers can be complex and confusing. When it comes to Medicare, they will reimburse telehealth services provided by providers located outside of their state, but not outside of the United States. Physicians are also not currently required by the Centers for Medicare and Medicaid Services (CMS) to list their home address as a practice location on their Medicare enrollment forms until December 31, 2024.

For Medicaid, the rules vary from state to state. Many states allow providers to be located outside of their state as long as they are appropriately licensed. The issue of whether a provider can be located outside of the U.S. is often not addressed in state Medicaid rules. It is important to carefully review commercial payer policies, such as Medicaid, on a case-by-case basis. If the state Medicaid program or commercial payer does not have specific guidelines on the issue, it is recommended to confirm their position before submitting claims to avoid potential issues with audits and overpayment demands.

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