Medicare is changing telehealth billing requirements for Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs) beginning October 1, 2026. The change affects how eligible non-behavioral health distant-site telehealth services are reported to Medicare and requires participating organizations to update their billing systems before the new requirements take effect.
The development is particularly relevant for California providers serving rural, underserved, and geographically dispersed populations. RHCs and FQHCs have become important access points for virtual care, and changes to Medicare claims processing can affect coding workflows, staff training, reimbursement operations, and administrative preparation.
Telehealth Billing Rules Change October 1
Under the new Medicare requirements, RHCs and FQHCs will no longer use HCPCS code G2025 to report applicable non-behavioral health distant-site telehealth services beginning with dates of service on or after October 1, 2026.
Instead, organizations must report the individual CPT or HCPCS code that describes the telehealth service provided. CMS will publish the applicable codes annually alongside the Medicare Physician Fee Schedule.
This represents an important operational shift because practices will need to connect the specific clinical service provided with the appropriate individual billing code rather than relying on the previous G2025 reporting approach.
RHCs and FQHCs Need System Updates
The transition means telehealth billing systems must be reviewed before the October implementation date. Billing departments, EHR administrators, coding teams, and practice managers should determine whether their existing software can accommodate the revised reporting structure.
CMS issued its formal instructions in May 2026, establishing October 1 as the effective date for the new billing requirements and October 5 as the implementation date for the associated system changes.
For healthcare organizations, this creates a relatively short window for testing workflows, educating staff, and coordinating with billing vendors or Medicare Administrative Contractors.
Individual CPT and HCPCS Codes Become Central
Under the revised telehealth billing structure, RHCs and FQHCs must report the individual CPT or HCPCS code describing the distant-site service. CMS also requires the appropriate revenue code and one of two applicable telehealth modifiers.
Modifier 93 identifies synchronous telemedicine delivered through real-time interactive audio-only technology, while modifier 95 identifies synchronous telemedicine delivered through real-time interactive audio and video technology.
The distinction makes accurate documentation particularly important. The claim must accurately represent both the service performed and the technology used to deliver it.
G2025 Has an Important Deadline
Practices should pay particular attention to the October 1 transition because G2025 remains part of the existing framework through September 30, 2026, for applicable services.
CMS’s previous guidance allowed RHCs and FQHCs to report non-behavioral health telecommunications services using G2025 through the end of September. The new requirements replace that approach for dates of service beginning October 1.
This creates a clear dividing line for billing teams. Claims involving September services should not automatically be handled using the new October methodology, while October services will require the revised individual-code approach.
Telehealth Access Remains Important for Rural Communities
The change to telehealth billing occurs while Medicare continues supporting RHC and FQHC participation in virtual care. Federal legislation enacted in 2026 extended the authority for these facilities to provide non-behavioral health distant-site telehealth services through December 31, 2027.
That extension provides greater certainty for organizations that rely on virtual care to reach patients outside traditional clinical settings.
For California’s rural communities, telehealth can help connect patients with physicians and other practitioners when geographic distance, provider shortages, or transportation limitations create barriers to in-person care.
Audio-Only Services Require Attention
The revised telehealth billing framework also preserves a role for audio-only services when they meet applicable requirements. CMS specifically identifies modifier 93 for synchronous telemedicine delivered through telephone or another real-time interactive audio-only system.
Practices should therefore ensure that staff understand the distinction between audio-only and audio-video encounters.
Accurate documentation of the communication method can help support the selected modifier and reduce avoidable claim-processing problems.
Behavioral Health Uses Different Rules
The October change primarily concerns non-behavioral health distant-site telehealth services. Behavioral health services furnished through telecommunications technology are subject to separate Medicare payment policies for RHCs and FQHCs.
This distinction is important because practices should not assume that one telehealth claims workflow applies to every service category.
Organizations providing both medical and behavioral healthcare should review their workflows separately to ensure that each service is reported under the appropriate Medicare requirements.
Documentation Will Support Accurate Claims
The updated telehealth billing requirements increase the importance of documentation that clearly identifies the service delivered and the technology used.
Physicians and other eligible practitioners should ensure clinical documentation supports the reported service. Billing teams should also verify that the corresponding CPT or HCPCS code accurately reflects the encounter.
This is particularly relevant for organizations transitioning away from the simplified G2025 approach because individual service codes may require more detailed alignment between clinical documentation and claims data.
California Providers Should Coordinate With Vendors
California RHCs and FQHCs should communicate with EHR vendors, clearinghouses, billing companies, and Medicare Administrative Contractors before October 1.
A practice can update its internal workflow correctly and still encounter claims problems if external systems have not incorporated the new codes, modifiers, or edits.
CMS’s implementation instructions provide an important starting point, but organizations should also verify operational details with their billing partners before submitting claims under the revised framework.
Operational Preparation Should Begin Before October
The most immediate priority for affected organizations is implementation testing. Practices should identify the telehealth services they routinely provide, determine which individual CPT or HCPCS codes apply, and confirm that their billing systems can transmit the required information.
Staff responsible for coding, claims submission, and revenue cycle management should receive updated instructions before the first October claims are submitted.
Early testing can also identify discrepancies between EHR templates, coding workflows, clearinghouse edits, and payer processing requirements.
Long-Term Outlook for Telehealth Billing
The new telehealth billing requirements demonstrate how Medicare continues moving virtual healthcare toward more specific service-based reporting. Rather than relying on a single reporting code for applicable RHC and FQHC distant-site services, the revised approach connects reimbursement more directly to the individual service provided.
For California physicians and healthcare organizations, the immediate challenge is operational readiness. Updating EHR configurations, training billing personnel, confirming modifiers, and coordinating with vendors can help reduce disruption when the October 1 transition begins.
The broader significance is that telehealth remains an established component of healthcare delivery, while federal payment systems continue evolving to reflect how virtual services are provided.
Visit CMS — RHCs and FQHCs: Billing Distant Site Telehealth Services for the official billing instructions, applicable modifiers, payment information, and implementation requirements.
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