With current telehealth flexibilities set to expire on March 31, hospitals, healthcare systems, and providers are once again asking whether they should consider telehealth a permanent care delivery model or a temporary measure that will not be supported by long-term federal policy.
Initially implemented during the COVID-19 pandemic, these flexibilities have been extended multiple times with bipartisan support and have reshaped many aspects of healthcare delivery. Yet, without clarity on their permanence, stakeholders remain in limbo. A patchwork of short-term extensions leaves providers uncertain about budgeting, infrastructure investments, and staffing needs. As the clock ticks down, many offices aren’t sure how to schedule upcoming patient appointments.
Background
The Centers for Medicare & Medicaid Services (CMS) defines telehealth, also referred to as telemedicine, as the “use of electronic information and telecommunications technologies to extend care when [the provider] and the patient aren’t in the same place at the same time.” Telehealth encompasses a variety of modalities, including asynchronous communications (commonly known as “store-and-forward”) and remote patient monitoring. However, for the purposes of this discussion, telehealth refers specifically to synchronous communication—real-time video or telephone interactions—between patients and providers
As Applied Policy has previously reported, the potential for remote care was recognized shortly after the invention of the telephone. However, telehealth was not widely considered a policy option until the Balanced Budget Act of 1997 (BBA), which mandated Medicare reimbursement for certain telehealth services and funded demonstration projects to assess its effectiveness.
In the Bipartisan Budget Act of 2018, Congress authorized the expansion of telehealth services within Medicare Advantage (MA) plans. Building on this, in 2019, CMS finalized a rule that broadened the scope of services MA plans could offer via telehealth, effective in the 2020 plan year. This policy change led to rapid adoption, with 58.1% of 2,992 unique MA plans offering new telehealth benefits by 2020.
CMS was slower to expand telehealth in fee-for-service Medicare, under which most beneficiaries were covered at the time. In fee-for-service, Medicare statute restricted payment for telehealth services to providers treating patients in rural areas and required beneficiaries to receive care at designated originating sites, such as hospitals or clinics. Additionally, reimbursement rates for telehealth services were notably lower than those for in-person visits.
Recognizing Telehealth’s Potential During COVID
The gap in the availability of telehealth in fee-for-service Medicare and Medicare Advantage plans may have persisted or widened if not for the onset of the COVID-19 pandemic in 2020. However, in March 2020, as the Centers for Disease Control and Prevention (CDC) and CMS worked to establish guidelines for non-emergent and elective medical services, CMS moved quickly to relax telehealth rules to expand access to remote care using its waiver authority during a public health emergency.
The agency’s new flexibilities allowed fee-for-service Medicare patients in all settings—not just rural areas—to receive telehealth care, removing restrictions on originating sites to permit care from home. CMS also expanded the list of qualifying providers, allowed audio-only telephone evaluations and management visits for both new and established patients, and permitted providers to conduct telehealth visits from their homes without updating their billing addresses. Perhaps most significantly, Medicare began reimbursing physicians for telehealth services at the same rate as in-office visits.
While many of the new telehealth flexibilities were specific to Medicare, pandemic-era legislation also provided for changes in the coverage and provision of telehealth services under private insurance plans. The Coronavirus Aid, Relief, and Economic Security (CARES) Act addressed the provision of care under High Deductible Health Plans (HDHPs), allowing them to cover telehealth services before patients met their deductibles without jeopardizing Health Savings Account (HSA) eligibility.
These sweeping legislative and policy changes sparked an unprecedented surge in telehealth adoption. According to the Department of Health and Human Services (HHS), the percentage of Medicare visits conducted via telehealth increased from less than 1% in 2019 to over 43% in April 2020. This dramatic growth underscored the critical role telehealth played in maintaining access to care during the public health emergency.
Although the federal COVID-19 Public Health Emergency officially concluded on May 11, 2023, telehealth flexibilities implemented during the pandemic have been extended through federal regulations and congressional legislation. Most recently, the American Relief Act, 2025—a continuing resolution passed in December 2024 to avert a government shutdown—extended certain telehealth flexibilities through March 31, 2025.
The Department of Health and Human Services maintains a webpage dedicated to current telehealth policies. However, it does not provide clarity for patients or providers regarding the future of telehealth beyond the current three-month extension.
Arguments For and Against
Proponents of extending telehealth flexibilities contend that telehealth enhances continuity of care by providing access outside of normal clinic hours, reduces the impact of physician shortages in underserved and rural areas, and offers a convenient alternative for patients with mobility challenges.
The American Medical Association (AMA) has described telehealth as “critical to the future of healthcare.” The AMA actively supports congressional action to make Medicare flexibilities permanent and to increase access to telehealth services in the commercial insurance market.
However, opponents have expressed concerns about the potential for overutilization of services, fraud, and challenges in ensuring the quality of care delivered remotely. They caution that without proper regulations, expanded telehealth could lead to increased healthcare costs and compromise patient safety. Some also point to the digital divide, noting that not all patients have equal access to the technology required for telehealth services, which could exacerbate existing health disparities.
Cost-effectiveness
Assessing the cost-effectiveness of telehealth is complex. At least one pre-pandemic study found that telehealth increased both utilization and spending. In a Congressionally mandated review released in its June 2023 report to Congress, the Medicare Payment Advisory Commission found that telehealth was associated with ‘slightly improved access to care for some beneficiaries and slightly increased costs to the Medicare program.’
The Congressional Budget Office has noted that evaluating the financial implications of permanently extending telehealth services requires identifying and quantifying its impact on downstream spending. Key considerations include whether timely access to care via telehealth can help reduce future costs or if telehealth services might be duplicative when patients subsequently seek in-person care.
Telemedicine Prescribing
The broader discussion of telehealth policy includes the distinct regulatory issue of prescriptive authority. One of the pandemic-era flexibilities allowed providers to prescribe controlled substances such as buprenorphinewithout an initial in-person visit. In the final week of the Biden administration, the Drug Enforcement Administration (DEA) introduced a proposed rule which would establish new categories for telemedicine prescribing of controlled substances. The rule outlines distinct frameworks for prescribers practicing telemedicine across state lines and for those providing care under limited telehealth-only circumstances. While intended to formalize guardrails around prescribing of controlled substances, the proposal also raises questions about implementation and compliance, particularly for healthcare systems and providers navigating interstate telehealth regulations.
To date, President Trump’s nominee for DEA Administrator, Derek S. Maltz, whose career as a DEA special agent focused on drug trafficking networks, has not indicated his position on the issue.
Waiting for Resolution
The American Telemedicine Association (ATA) has described current restrictions on telehealth as ‘antiquated’ and has urged the Trump administration to collaborate with Congress to make existing Medicare telehealth flexibilities permanent. There are several indications that it may.
During his first term, President Trump took significant steps to expand telehealth access. In August 2020, he signed an executive order aimed at improving rural health and telehealth services, directing the Department of Health and Human Services to propose regulations extending telehealth benefits beyond the public health emergency. Further, Robert F. Kennedy Jr., President Trump’s nominee for Secretary of Health and Human Services, favorably referenced telehealth several times during his Senate confirmation hearings.
Ultimately, the authority to extend or permanently enact telehealth flexibilities rests with Congress. While current flexibilities remain in place through March 31, 2025, government funding expires on March 14. This means lawmakers have only five weeks to act to prevent a government shutdown. As Applied Policy has previously discussed, Republicans are expected to extend funding through reconciliation and have the option of pursuing two reconciliation bills in the current term. While Republican House members have signaled plans to proceed with a single bill, their counterparts in the Senate are working on two. It is yet unclear if telehealth will be prioritized in any.
Stakeholders are watching closely, hoping for long-term certainty rather than yet another short-term extension. The last five years have demonstrated telehealth’s potential. Realizing its promise now depends on definitive congressional action.