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As hospitals and clinics prepare for 2026, the Centers for Medicare & Medicaid Services (CMS) has finalized significant updates to Medicare telehealth policy as part of the CY 2026 Physician Fee Schedule (PFS) Final Rule. The final rule follows a proposed rule period during which CMS solicited public comment on potential changes to Medicare telehealth policy. These changes come at a pivotal moment—just months after many pandemic-era waivers expired on October 1, 2025—leaving healthcare organizations uncertain about what telehealth will look like moving forward.
The final rule offers clarity—and in several areas, new flexibility—that organizations should understand as they adjust their clinical workflows, compliance requirements, and revenue cycle processes heading into the new year.
On October 1, several pandemic-era telehealth flexibilities expired, requiring Medicare to revert certain policies back to pre-pandemic standards. These changes were required to comply with statutory provisions outlined in the Social Security Act. Key changes included:
These changes placed new operational and financial pressures on hospitals—especially rural and community facilities that had relied heavily on expanded home-to-hospital and home-to-clinic telehealth options.
However, the CY 2026 Final Rule introduces updates that help balance these rollbacks with new, long-term telehealth policies.
One of the most impactful updates is CMS’ decision to permanently allow “direct supervision” via real-time audio/video technology.
This means supervising physicians or practitioners can oversee certain clinical staff activities without being physically in the same room, supporting:
This flexibility was originally temporary during the PHE—and now becomes a stable long-term option.
CMS has eliminated longstanding frequency limits for:
This change removes frequency limitations for subsequent inpatient visits, subsequent nursing facility visits, and critical care consultations, improving access and care coordination by allowing hospitals and clinicians greater flexibility in care delivery, especially when in-person visits are difficult or resource-intensive.
CMS has added several new permanent telehealth-eligible services, including:
To qualify for inclusion on the Medicare Telehealth Services List, these services must be delivered using an interactive telecommunications system, as defined by CMS, which enables real-time communication between the patient and provider.
These additions support growing needs around behavioral health services, obesity care, and team-based treatment models that benefit from remote access.
While geographic/originating site rules have resumed for many services, the final rule maintains telehealth flexibilities for:
These ongoing flexibilities continue to support patient access in the communities that need it most. These policies also take into account the unique challenges of providing care in a facility setting, particularly in rural and underserved areas, where distinctions between facility and non-facility settings can impact payment and service delivery.
The Centers for Medicare & Medicaid Services (CMS) has introduced a series of important updates to the 2026 Medicare Physician Fee Schedule (PFS), reshaping how telehealth services are reimbursed and expanding opportunities for healthcare providers across the country. These changes are designed to enhance access to care for Medicare beneficiaries, particularly those served by rural health clinics (RHCs) and federally qualified health centers (FQHCs), while also supporting the continued growth and integration of telehealth in clinical practice.
A major highlight of the 2026 final rule is the expansion of the Medicare Telehealth Services List. New additions include group behavioral counseling for obesity, multiple family group psychotherapy, and infectious disease add-on codes for inpatient visits. By broadening the range of telehealth-eligible services, CMS is enabling RHCs, FQHCs, and other healthcare providers to deliver more comprehensive care remotely, addressing both physical and behavioral health needs.
Another significant advancement is the permanent adoption of virtual direct supervision. Under the new policy, teaching physicians can now provide direct supervision for services furnished involving residents through real-time visual interactive telecommunications, regardless of physical location. This permanent virtual direct supervision also extends to diagnostic tests and technical services paid under the Physician Fee Schedule, ensuring that high-quality care can be delivered even when providers and patients are not co-located. This is especially impactful for rural and underserved areas facing provider shortages.
CMS has also updated coding and payment policies to reflect the evolving landscape of telehealth services. The 2026 Medicare Physician Fee Schedule introduces new codes for Advanced Primary Care Management (APCM), allowing providers to bill separately for these services and better support advanced primary care models. In addition, payment policies for Digital Mental Health Treatment (DMHT) have been expanded to include devices used in the treatment of attention deficit hyperactivity disorder (ADHD), further supporting the integration of digital tools in behavioral health care.
To ensure fair and accurate reimbursement, CMS has finalized updates to the Geographic Practice Cost Indices (GPCIs), which adjust Medicare payments based on regional cost differences. The final rule also implements a claims-based methodology for excluding units of drugs purchased under the 340B Drug Pricing Program from Medicare drug inflation rebate calculations, supporting transparency and compliance.
Quality payment programs are also evolving under the 2026 final rule. Updates to the Merit-Based Incentive Payment System (MIPS) and the Medicare Shared Savings Program (MSSP) are designed to incentivize high-quality, cost-effective care for Medicare beneficiaries, with a continued emphasis on telehealth services and care coordination.
Overall, the 2026 Medicare Physician Fee Schedule brings meaningful improvements to telehealth reimbursement, supporting healthcare providers in delivering a broader range of services to Medicare beneficiaries. The expansion of the medicare telehealth services list, permanent virtual direct supervision, and refined coding and payment policies will help RHCs, FQHCs, and other telehealth providers increase access, improve quality, and manage costs more effectively in the years ahead.
The combination of expired waivers and new flexibilities creates a hybrid telehealth environment—more restrictive than the PHE, but more flexible than traditional pre-pandemic policies. Hospitals and clinics should also closely monitor future rulemaking by CMS, as additional changes to telehealth and payment policies are anticipated.
Hospitals and clinics should prepare by:
Ensure your clinical systems support:
With changes in originating site rules and telehealth coverage:
Identify service lines where the CY 2026 changes open new opportunities, such as:
The new telehealth flexibilities support more integrated care workflows, making this an ideal time to:
Organizations should also be aware of changes to the health equity adjustment in quality scoring and risk adjustment policies, as these may impact care coordination strategies.
The CY 2026 Final Rule represents a significant step toward defining the post-pandemic future of telehealth. Although the expiration of some flexibilities creates challenges, CMS’ new long-term policies provide opportunities to deliver care more efficiently, support clinical teams, and expand access—especially in rural and underserved areas.
As hospitals navigate this transition, adopting the right workflows, documentation practices, and revenue cycle strategies will be essential to success in 2026 and beyond. CMS will continue to rely on input from the Medicare Payment Advisory Commission and routinely updated hospital data to refine telehealth payment policies in future years.
