More than half of independent therapists now provide some portion of their care via telehealth. For Medicare billing, telehealth adds a layer of complexity that doesn't exist in commercial payer billing — because the rules are still being written, extended, and modified as Congress periodically renews post-PHE flexibilities.
Here's the current state of Medicare telehealth billing for mental health services, including the place of service codes that trip up even experienced billers.
Medicare requires a specific place of service (POS) code on every telehealth claim to identify where the patient was located during the service. Using the wrong code is a billing error even when the underlying service is legitimate and properly documented.
| POS Code | Description | When to Use |
|---|---|---|
| POS 02 | Telehealth Provided Other Than Patient's Home | Patient is at a clinic, hospital, or other facility (not their home) during the session |
| POS 10 | Telehealth Provided in Patient's Home | Patient is at their residence during the session — the most common scenario for private practice telehealth |
For most private practice therapists providing telehealth, the patient is at home — which means POS 10 is the correct code. Before 2023, only POS 02 existed for telehealth, which means older billing software and older billing habits may be using an outdated code.
Medicare does cover audio-only telehealth for mental health services, but with conditions that differ from video telehealth. For audio-only billing to be appropriate, the patient must not have the capability to access video telehealth, and the clinician must document this. Audio-only sessions cannot simply be a preference — they require a clinical or technological justification.
The reimbursement rate for audio-only is also lower than video-based telehealth in many cases. Know your rates before defaulting to audio-only as a convenience option.
Many of Medicare's telehealth flexibilities were tied to the COVID-19 Public Health Emergency, which officially ended in May 2023. Congress has subsequently passed multiple extensions of various telehealth provisions, including mental health services specifically. The current extension status affects geographic restrictions, originating site requirements, and certain coverage categories.
The critical point for billing compliance: these extensions have expiration dates, and Congress does not always renew them before they expire. A provision that was covered last quarter may not be covered this quarter. The practical implication is that therapists who assumed their telehealth billing rules were stable may be surprised to find coverage gaps on claims submitted after an extension lapses.
Telehealth rules change frequently: TherapyBillingClarity.com monitors every CMS telehealth update and Congressional extension for mental health services. Your monthly report includes current telehealth billing rules — so you're never caught billing under outdated guidance. Learn more →