Telehealth Reimbursement for Therapists Is Still Up in the Air — Here's What You Actually Need to Do

In October 2025, Medicare telehealth flexibilities expired. For 43 days, practices that relied on virtual sessions were in limbo. Then Congress passed a spending bill, reinstated everything retroactively, and extended coverage through January 30, 2026. Then on February 3, 2026, they passed another extension through December 31, 2027.

This is the pattern. Short extensions. Brief lapses. Retroactive fixes. Repeat.

If you're a therapist running a practice on telehealth reimbursement in 2026, you need to stop assuming the rules will stay stable and start building a practice that works regardless of which way Washington goes next.

This isn't a policy deep-dive. It's the practical checklist for what you need to verify, confirm, and document right now.

Where Federal Telehealth Rules Stand Right Now

Here's the current snapshot as of early 2026:

The permanent wins for mental health:

• Marriage and family therapists (MFTs) and licensed mental health counselors (LMHCs) are permanently eligible as Medicare distant site providers. This survived every extension debate. It's not going anywhere.
• Mental health services have stronger telehealth protections than almost any other specialty. Congress has consistently carved out behavioral health in every extension bill.

The temporary extensions (through December 31, 2027):

• The in-person visit requirement (requiring patients to see you in person within six months of their first telehealth session) is waived through December 31, 2027.
• Audio-only telehealth for mental health services remains covered through the same date.
• Geographic restrictions remain lifted. Patients can receive telehealth from anywhere, not just designated rural areas.
• The patient's home is an eligible originating site through the same deadline.

What's still pending:

• The CONNECT for Health Act (H.R. 4206/S. 1261) would make many of these flexibilities permanent. It has 212 House cosponsors and 71 Senate cosponsors. Bipartisan support is strong. But it hasn't passed.
• The Telehealth Modernization Act (S. 2709) would extend the in-person waiver through October 2027. This overlaps with what Congress already passed but signals ongoing legislative attention.

What this means for your practice: The December 2027 deadline is the next cliff. That's roughly 22 months away. Enough time to plan, not enough time to ignore.

The Difference Between Medicare Rules and Private Payer Rules

This is where therapists get tripped up. Medicare telehealth rules get all the headlines. But most solo therapists bill more commercial insurance than Medicare.

Private payer telehealth coverage is governed by state law, not federal law. And state law varies wildly:

• 44 states have some form of private payer telehealth law on the books
• Only 23 states require payment parity (same rate for telehealth as in-person)
• 5 states have parity with caveats or limitations
• 22 states have no parity requirement at all

If you practice in one of the 22 states without parity, your commercial payers can reimburse telehealth at whatever rate they choose. Some pay parity voluntarily. Others don't. And voluntary parity can change with a contract update. We covered this in detail in our [telehealth parity revenue stress test](https://panelauthorityusa.com/blog/telehealth-parity-therapy-practice-revenue).

The practical implication: you can't just check "does my state allow telehealth?" You need to check each payer individually.

Your Payer-by-Payer Telehealth Audit

Here's the exercise. Block off 90 minutes this week and run through it.

Step 1: List your top five payers by claim volume.

Pull the last three months of billing data. Which payers are you submitting the most telehealth claims to? Rank them by volume.

Step 2: For each payer, find their telehealth policy.

Don't rely on what you remember from credentialing. Policies change. Look for:

• Is there a written telehealth reimbursement policy? (Check the provider portal or call provider relations.)
• Does the policy state payment parity explicitly?
• Are there session limits for telehealth visits per year?
• Does the payer require periodic in-person visits?
• Are audio-only sessions covered, or only audio-video?
• What modifiers and place of service codes does this payer require?

Step 3: Document everything.

Create a simple spreadsheet. Payer name, policy URL or reference number, parity status, session limits, modifier requirements. This document becomes your billing reference and your evidence if a claim gets denied.

Step 4: Flag the risks.

Any payer without explicit parity language is a risk. Any payer with session limits you're approaching is a risk. Any payer that only covers audio-video (not audio-only) limits your flexibility with clients who don't have reliable internet.

Common Telehealth Billing Mistakes That Cost You Money

Even when telehealth is fully covered, billing errors eat into your revenue. These are the most common ones for therapy practices:

Wrong place of service code. When the patient is at home, use POS 10. When they're at another facility, use the appropriate facility code. Getting this wrong can trigger a denial or a reduced rate.

Missing or wrong modifier. Modifier 95 for synchronous audio-video. Modifier 93 or FQ for audio-only. Some payers have specific modifier preferences. Using the wrong one delays payment.

Not documenting the telehealth format. Your session note should state that the service was provided via telehealth, whether it was audio-video or audio-only, and confirm that the patient consented to the virtual format. Some payers audit for this.

Billing audio-only without checking eligibility. Audio-only coverage expanded significantly during the pandemic, but not every payer covers it for every code. Verify before you bill.

Assuming ERISA plans follow state law. Self-funded employer plans governed by ERISA are exempt from state telehealth mandates. A patient with Blue Cross through a large employer may not have the same telehealth coverage as a patient with Blue Cross through a state-marketplace plan. The insurance card looks the same. The coverage isn't.

What to Do About the Audio-Only Question

Audio-only telehealth is a big deal for therapists. Some clients are in rural areas with poor internet. Some are calling from their car during a lunch break. Some have anxiety about being on camera.

For Medicare: audio-only mental health services are covered through December 31, 2027. The [2026 CPT code changes](https://panelauthorityusa.com/blog/2026-cpt-code-changes-therapists-private-practice) expanded the codes recognized for telehealth delivery, including audio-only options.

For commercial payers: coverage varies. Some states mandate audio-only parity. North Carolina and Ohio recently incorporated AMA telehealth codes that include audio-only options. Other states leave it entirely to payer discretion.

If audio-only sessions are a significant part of your practice, verify coverage with each payer now. Don't wait for a denial to find out.

Building a Practice That Survives Policy Changes

The fundamental problem with telehealth reimbursement in 2026 is uncertainty. The rules keep changing. Extensions keep getting passed at the last minute. Payer policies update without fanfare.

The therapists who handle this best are the ones who don't depend on any single policy staying in place:

Diversify your session formats. If telehealth reimbursement tightened tomorrow, could you see patients in person? You don't need a full office five days a week. But having access to a space, even a shared office or coworking therapy suite, gives you a fallback that pure-telehealth practices don't have.

Keep your credentialing current. [Strong payer contracts](https://panelauthorityusa.com/blog/payer-contracts-as-practice-equity) protect you because they explicitly define telehealth terms. When you credential or re-credential, negotiate for written telehealth parity language in your participation agreement. That language survives policy shifts better than a general payer bulletin.

Set a quarterly policy check. Telehealth rules change faster than most areas of insurance billing. Set a calendar reminder every 90 days to check federal legislation status, your state's telehealth laws, and your top payers' current policies. Fifteen minutes of checking beats a month of denied claims.

Track your telehealth revenue percentage. Know the number. If it's above 70%, you have significant concentration risk. That doesn't mean reduce telehealth. It means make sure every payer in that 70% has strong, written coverage policies.

The goal is a practice that takes full advantage of telehealth when the rules support it and doesn't collapse when the rules shift. That's not pessimism. That's planning.

Grab the [Practice Resource Kit](https://www.notion.so/resources) for payer audit templates and telehealth billing checklists that make the verification process faster.

Frequently Asked Questions

Are therapists still covered for Medicare telehealth in 2026?

Yes. Congress extended most Medicare telehealth flexibilities through December 31, 2027. Marriage and family therapists and licensed mental health counselors are permanently eligible as Medicare distant site providers. The in-person visit waiver is in place through the same date. Audio-only coverage for mental health services is also extended.

How many states require telehealth payment parity?

As of 2026, only 23 states require commercial insurers to reimburse telehealth at the same rate as in-person services. Five additional states have parity with limitations. Twenty-two states have no parity requirement, meaning payers can set their own telehealth reimbursement rates.

What happened during the 43-day telehealth lapse in 2025?

Medicare telehealth flexibilities expired on October 1, 2025 during a government shutdown. For 43 days, coverage was uncertain. Congress reinstated everything retroactively on November 12, 2025, and extended flexibilities through January 30, 2026. A subsequent extension in February 2026 pushed the deadline to December 31, 2027.

Can I bill audio-only therapy sessions to insurance?

It depends on the payer. Medicare covers audio-only mental health services through December 31, 2027. For commercial payers, coverage varies by state and plan. Some states mandate audio-only parity. Others leave it to payer discretion. Always verify audio-only coverage with each specific payer before billing.

What's the biggest telehealth billing mistake therapists make?

Using the wrong place of service code or modifier is the most common error. Use POS 10 when the patient is at home, modifier 95 for audio-video sessions, and modifier 93 or FQ for audio-only. The second biggest mistake is assuming all commercial plans follow state telehealth laws. Self-funded ERISA plans are exempt from state mandates, even if the insurance card looks identical to a state-regulated plan.