Counting Telehealth Providers in CMS Network Adequacy: The 2024 Rules Explained

The End of COVID-Era Ambiguity

For several benefit years during and after the COVID-19 public health emergency, CMS permitted Medicare Advantage plans to count telehealth providers toward network adequacy standards under temporary flexibilities. Those flexibilities created a period of productive ambiguity: plans could count virtual-only providers in thin counties, close gaps they couldn't fill physically, and meet adequacy thresholds in ways that CMS had not historically sanctioned. That era is over.

The 2024 Final Rule — published in the Federal Register on April 23, 2024, and effective for the 2025 benefit year — codified specific telehealth counting rules into the permanent regulatory framework at 42 CFR 422.112(b). The new rules resolve the ambiguity by establishing clear, permanent criteria for when telehealth providers may be counted toward adequacy and when they may not. Plans that were relying on the temporary flexibilities and have not updated their adequacy models to reflect the codified rules are operating with compliance risk that may not be visible until HPMS review.

This article explains exactly what the 2024 Final Rule says, which specialties are covered, what documentation plans must maintain, and how the rules interact with geographic exceptions and other adequacy mechanisms.

Which Specialties Allow Telehealth Substitution Under the 2024 Rule

The 2024 Final Rule does not permit telehealth counting universally across all 22 CMS specialty categories. It permits it for a defined list of specialties where CMS has determined that telehealth is a clinically adequate and practically available substitute for in-person access. For the 2025 benefit year, those specialties include:

• Behavioral health — psychiatry, clinical psychology, licensed clinical social work
• Primary care physicians — for certain plan designs where telehealth coverage is explicitly part of the benefit
• Allergy and immunology — in rural counties meeting additional criteria
• Neurology — subject to benefit design requirements

Critically, the rule does not permit telehealth substitution for specialties where in-person presence is a practical necessity for clinical care — surgery, interventional cardiology, radiology, emergency medicine, and similar procedural specialties. These specialties require physical contracted providers meeting time-and-distance standards regardless of telehealth availability. Plans that counted these specialties via telehealth under the temporary flexibilities must replace them with physically located contracted providers or file exception filings demonstrating provider unavailability.

CMS has indicated in the Final Rule commentary that the list of telehealth-eligible specialties may expand in future benefit years as evidence accumulates on the clinical equivalence of telehealth for additional specialty categories. Plans should monitor the annual Call Letter and Final Rule commentary for updates to this list.

State Licensure Requirements for Telehealth Counting

A telehealth provider can only be counted toward adequacy in a county where the provider is licensed to practice in the state in which that county is located. This requirement is straightforward in single-state plans but becomes operationally complex in multi-state service areas and in border counties where members may live in one state and receive services in another.

CMS applies the member's county of residence as the geographic unit for adequacy purposes, regardless of where the telehealth provider is physically located. A provider licensed only in Texas cannot be counted toward adequacy in an Oklahoma border county, even if that provider routinely provides telehealth services to residents of both states. The licensure must be in the state of the member's county of residence.

For plans operating in multiple states, this means that a telehealth provider network assembled to fill rural gaps must be reviewed county by county for state licensure compliance. A provider who is licensed in 30 states but not in the specific state of the county being evaluated cannot be counted. Plans that load telehealth providers into HPMS without verifying state-specific licensure against the county list are at risk of having those providers removed during CMS review, which can re-open adequacy gaps after submission.

The Interstate Medical Licensure Compact and the Psychology Interjurisdictional Compact have expanded the number of states in which certain providers can practice via telehealth, and these compacts are relevant to telehealth counting. However, compact participation must still be verified for each provider and each state — compact eligibility does not automatically confer licensure in all member states.

Benefit Design Requirements for Telehealth Counting

A telehealth provider cannot be counted toward adequacy for a specialty unless the plan's benefit design covers the service as a telehealth benefit. This requirement, codified in the 2024 Final Rule, closes a loophole that previously allowed plans to count telehealth providers for adequacy purposes even when the plan's actual benefit design did not cover telehealth for that specialty or imposed member cost-sharing that effectively discouraged telehealth use.

In practice, this means the benefit design document must explicitly list the specialty as a covered telehealth service. If behavioral health telehealth is covered with a $0 copay, that benefit is available for counting. If a specialty is covered only via in-person visits, telehealth providers for that specialty cannot be counted regardless of whether they serve the plan's members via telehealth in practice.

Plans should reconcile their benefit design documents against their telehealth adequacy strategy before HPMS filing. The benefit design and the network adequacy filing are reviewed by different CMS teams, and inconsistencies between the two — a plan counting telehealth for a specialty that its benefit design does not cover via telehealth — are a reliable source of deficiency findings.

How Telehealth Providers Are Listed in HPMS

HPMS requires specific data entry for telehealth providers to distinguish them from physically located contracted providers. Plans must indicate the provider's modality (telehealth) and must verify that the provider's address of record in HPMS is a valid practice address — not a virtual-only address that cannot be geocoded for distance calculation purposes.

For adequacy calculation purposes, CMS does not apply time-and-distance standards to telehealth providers in the same way it does to in-person providers. Because telehealth by definition eliminates travel requirements, CMS counts a telehealth provider as available to members throughout the county or counties where the plan's benefit covers telehealth services, provided the provider is licensed in the relevant state. Plans should confirm with their HPMS vendor or CMS technical assistance contacts how telehealth providers are being geocoded and counted in the specific HPMS build for the current benefit year, as the technical implementation has evolved with the 2024 Final Rule changes.

Inaccurate HPMS listings for telehealth providers — wrong modality designation, missing licensure state, incorrect panel status — result in the provider being excluded from the adequacy calculation, often without a clear error message. Plans that rely on telehealth providers to fill adequacy gaps should conduct a manual verification of their HPMS listings before the filing deadline to ensure that telehealth providers are being counted as intended.

Telehealth Counting and Geographic Exceptions

Geographic exceptions — filed when a plan cannot meet time-and-distance standards because qualified providers are genuinely unavailable in the county — interact with telehealth counting in a way that is not always clearly understood. The general principle is that a plan cannot file a geographic exception for a county where telehealth providers are available and countable. If telehealth providers in an eligible specialty are available and the plan could count them toward adequacy, CMS will not approve an exception that claims provider unavailability.

This creates a planning requirement: before filing a geographic exception, plans must verify whether telehealth counting would resolve the deficiency. If it would, the plan should count telehealth providers rather than file an exception. If telehealth counting resolves the deficiency only partially — for example, if telehealth satisfies behavioral health adequacy but not primary care — the plan may combine telehealth counting for the resolved specialty with an exception filing for the unresolved specialty.

CMS expects plans to use every available tool, including telehealth counting, before filing a geographic exception. Exception filings that do not address telehealth availability will receive additional scrutiny, and plans that file exceptions in counties where telehealth could resolve the gap may receive findings that the exception was improperly filed.

Practical Scenarios: Where Telehealth Counting Resolves Rural County Gaps

Rural counties are where telehealth counting makes the most practical difference, and where the complexity of the 2024 rules is most consequential. A few illustrative scenarios:

• Behavioral health in frontier counties — A plan operating in counties with fewer than six psychiatrists within 60 miles can count telehealth psychiatrists who are licensed in the state and whose services are covered under the plan's behavioral health benefit. This is the highest-impact application of the 2024 rules and typically resolves the most persistent adequacy gaps in rural markets.
• Neurology in rural counties — Neurology is eligible for telehealth counting in rural counties under the 2024 rule. A plan that has one in-network neurologist within the threshold but needs two to meet adequacy standards can add a telehealth neurologist to resolve the gap, provided the benefit covers telehealth neurology visits.
• Primary care at plan discretion — Primary care telehealth counting is benefit-design dependent under the 2024 rule. Plans that have structured their primary care benefit to include telehealth visits as a first-line access option can count telehealth PCPs; plans that position telehealth as a supplement to in-person primary care cannot. This distinction creates a planning lever: plans that want to count telehealth for primary care adequacy purposes need to design that intent into the benefit from the beginning of the plan year, not add it as an afterthought during network build.

Provider Agreements Needed to Count Telehealth

A telehealth provider must have a signed participation agreement with the plan to be counted toward adequacy — the same requirement that applies to in-person contracted providers. A provider agreement for telehealth services must specify the services covered via telehealth, the geographic scope (which states and counties the provider agrees to serve), the applicable telehealth platform or modality, and the member cost-sharing structure.

Plans that count telehealth providers without executed participation agreements — for example, by relying on a telehealth vendor's platform agreement rather than a provider-specific contract — risk having those providers excluded during CMS review. The participation agreement is the evidence that the provider is committed to serving the plan's members, and without it, the provider's availability is theoretical rather than contracted.

Blueprint tracks telehealth provider agreements separately from in-person provider agreements, with fields for geographic scope, licensure states, and service categories. This separation allows network operations teams to verify at a glance which telehealth providers are HPMS-ready (agreement executed, licensure verified, benefit coverage confirmed) versus which are still in the pipeline. For plans relying on telehealth to close rural adequacy gaps, this visibility is essential for avoiding last-minute discoveries that a counted provider is not actually contractually available.

What Plans Should Do Before the Next HPMS Filing

Plans that have not formally audited their telehealth counting practices against the 2024 Final Rule should do so before the next HPMS filing window opens. The audit should confirm: which specialties are being counted via telehealth, whether those specialties are on the CMS-approved list, whether each counted provider is licensed in the relevant state for each county where they are being counted, whether the plan's benefit design covers the service via telehealth, and whether executed participation agreements are on file for each counted provider.

Plans that discover discrepancies during this audit have two paths: cure the discrepancy by documenting missing elements (licensure verification, agreement execution, benefit design confirmation) before filing, or adjust the adequacy strategy to replace non-qualifying telehealth providers with in-person contracted providers or exception filings. The earlier this audit is conducted relative to the filing deadline, the more options are available.