Telehealth and Network Adequacy in 2025: What Counts, What Doesn't

The Telehealth Adequacy Question

Since the COVID-19 public health emergency expanded telehealth access across Medicare, health plans have frequently asked whether telehealth providers can satisfy CMS network adequacy requirements. The answer is nuanced, has evolved across regulatory cycles, and varies by specialty type and plan type. In 2025, the rules are more permissive than they were pre-pandemic but still more restrictive than many network development teams assume.

Getting this wrong in either direction has real consequences. Plans that over-rely on telehealth to satisfy adequacy requirements may find their submissions rejected or deficiencies issued. Plans that under-leverage legitimate telehealth arrangements miss opportunities to achieve adequacy in geographically challenging markets.

The Baseline CMS Framework

CMS evaluates Medicare Advantage network adequacy primarily through its time and distance standards, which specify maximum drive times and distances from member residence to contracted providers. For most specialty types and most counties, these standards require an in-person, physically accessible provider within defined parameters.

Telehealth providers — meaning providers who deliver care exclusively or primarily via video or phone — do not satisfy time-and-distance standards because they have no physical service location. A plan cannot count a telehealth-only psychiatry practice as satisfying the behavioral health adequacy requirement if there are no physically accessible behavioral health providers within the required distance, because the member could not physically access that provider even if they needed in-person care.

This is the foundational limitation that many plans misunderstand: telehealth supplements in-person access but generally cannot substitute for it under CMS's primary adequacy measurement methodology.

Where Telehealth Does Count: The Telehealth Flexibilities

That said, CMS has created specific provisions under which telehealth can contribute to adequacy calculations:

• Telehealth-specific specialty types: For certain behavioral health and mental health specialty types, CMS has recognized telehealth arrangements as eligible to count toward adequacy in counties where in-person access is limited. Plans should review current HPMS guidance for the specific specialty codes and county classifications where this applies.
• Supplemental telehealth provider networks: Plans may include telehealth providers as supplemental to their in-person network. While these providers do not count toward primary adequacy thresholds, they do count toward the broader "meaningful access" assessment CMS uses when evaluating adequacy waivers.
• Provider hybrid practices: A provider who offers both in-person and telehealth visits counts toward adequacy based on their physical location. Their telehealth offering is simply an additional access modality — it does not reduce or increase their adequacy credit.

Telehealth and the Good Faith Effort / Waiver Process

When a plan cannot meet adequacy standards through in-person contracting alone — a common situation in rural counties and frontier markets — it can request a waiver from CMS. The waiver request must demonstrate good faith efforts to recruit in-person providers and describe the alternative access arrangements the plan will use to ensure member access despite the gap.

Telehealth is explicitly recognized as an alternative access arrangement in the waiver process. A plan seeking a waiver for a rural county with no in-person psychiatrist, for example, can support its waiver application by documenting its contracted telehealth behavioral health network and the technology-assisted access it provides to members.

This is the most reliable and legitimate pathway for telehealth to contribute to adequacy in challenging markets: not as a substitute for the primary adequacy standard, but as the documented alternative access mechanism that makes a waiver approvable.

State-Specific Medicaid Rules

For Medicaid managed care plans, telehealth adequacy rules are set by state Medicaid agencies, not CMS, and vary significantly by state. Several states have updated their managed care contracts to explicitly allow telehealth providers to satisfy certain specialty adequacy requirements, particularly for behavioral health. Plans operating Medicaid MCOs should review their state's managed care contract appendix on network standards annually, as these provisions have been updated in many states following the pandemic-era telehealth expansion.

Provider Directory and Credentialing Implications

Plans that include telehealth providers in their network — whether for adequacy credit or as supplemental access — must credential those providers to the same standard as in-person providers. Telehealth-only providers must be credentialed, listed in the provider directory with accurate telehealth availability indicators, and verified for Medicare enrollment where required.

The provider directory must accurately reflect whether a provider is telehealth-only, in-person only, or hybrid. CMS's provider directory accuracy requirements include telehealth availability as an accuracy dimension, and directories that misrepresent a provider's modality generate accuracy failures.

What to Expect in 2025 and Beyond

CMS has signaled continued interest in expanding telehealth's role in MA adequacy, particularly for behavioral health and certain specialist types where in-person provider supply is demonstrably inadequate in rural markets. Plans should monitor the annual CMS Call Letter and HPMS Technical Guidance updates for changes to the specialty types and market conditions under which telehealth counts toward adequacy.

The direction of travel is toward greater flexibility, but the pace is cautious — CMS is balancing access expansion with its concern that allowing unlimited telehealth substitution could reduce beneficiary access to the hands-on, in-person care that Medicare is designed to ensure.