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Telemedicine reimbursement and all the ways physicians can earn income from telemed work

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Telemedicine has gone from a small niche digital market from the time of its emergence to one of the fastest-growing healthcare delivery services in the US. Along with the broader service of telehealth, it projected to be a $36 billion industry by 2020.

It is touted as a way to provide patients with better access to high quality, cost-effective care. Though the benefits to medical providers are less frequently hyped, it represents a huge opportunity for physicians.

Telemedicine can be practiced from a conventional health care delivery setting or from a physician’s home office. It can be used for a broad medical practice or a specific medical need of interest to the provider. It can be a full-time source of income or a side gig.

With regard to income, there are several ways that physicians can be compensated for practicing telemedicine. This article discusses the five main types of telemedicine reimbursement and how physicians can earn income through each method.

(Looking for telemed work? Check out the telemedicine opportunities on our job board!)

Work as a consulting physician for a telemedicine company

Working as a consulting physician for telemedicine company is, for most physicians, the easiest way to get started in telemedicine as a side hustle.

With this arrangement, an existing company that specializes in offering telehealth services hires physicians to conduct medical encounters through their electronic system. The company is responsible for the telemedicine technology and for finding the patients. They also take care of all general aspects of running a business, such as marketing and finances.

Examples of this type of company include the major telehealth players like Teladoc and American Well, as well as new, smaller entrants to the field such as Twentyeight Health.

Physicians doing this type of telemedicine are most commonly hired as contractors, though some companies may have part-time employed MDs. Payment is often on an hourly basis or a set amount per patient.

A major benefit to providers taking this route is that there is no administrative burden. You simply complete patient encounters, document and place orders using the company’s technology, and get paid for your services.

The main drawback for many consulting physicians – especially with the smaller telemedicine companies – is having a limited number of patients. Having multiple state medical licenses can mitigate this to some degree. However, even with several licenses, you’re at the mercy of the telemedicine company to acquire and send you patients to see. If you are being paid on a per-patient basis, a lack of patients means you don’t earn much money.

Moreover, the cost of keeping several state licenses active really adds up quickly.

Receive telemedicine reimbursement by health insurance companies for virtual visits

Practicing telemedicine doesn’t require working for a telemedicine company. Physicians can implement telemedicine within their existing medical practices and be reimbursed by patients’ health insurance companies.

In this situation, income comes from private healthcare payers, Medicare, or Medicaid. Offering telemedicine visits as one option to the patients of your existing medical practice can be a great perk for patients and a smart business move for practice owners. Some patients may be more likely to seek care when they have the option for a virtual visit. It can also save clinical staff time and resources.

For a practice that already has a panel of patients from a single geographic area, setting up telemedicine capabilities is fairly straightforward. It requires purchasing a license or subscription for a telemedicine technology, such as OnCall.

Assuming that the practice’s own EHR, e-prescribing method, and billing processes are used for telemedicine encounters, all that the technology needs to do is provide a HIPAA-compliant videoconferencing interface that both the patients and the provider can access. In fact, there are companies that offer this capability for free – check out Doxy.me and Push Health.

Logistics can get challenging for physicians wanting to supplement their in-person practice by acquiring new patients from other locations who will be seen exclusively by telemedicine. This is because every state has its own laws with regard to telemedicine practice requirements and insurance company obligations for telemedicine reimbursement.

Most states (but not all) have what is known as a telemedicine reimbursement parity law, meaning that payers have to reimburse for telehealth services in the same way they would for in-person care.

Receive direct or out-of-pocket payments from patients

Physicians who aren’t able to or who don’t want to bill insurance companies for telehealth reimbursement can set up a similar practice that charges patients directly. This is the virtual equivalent of a cash-only practice and can also take the form of a concierge practice.

As with the insurance payment option, this is a good approach for physicians who have an existing patient population. Already having a patient panel simply makes it faster to get a bustling telemedicine practice up and running. However, it is also an option for physicians wanting to start a 100% virtual self-pay practice from scratch.

Because insurance companies are not involved, physicians don’t need to be concerned with telemedicine reimbursement parity. But they do need to ensure they are following any other state laws that are pertinent to how telemedicine is practiced.

The technology used for this model of telemedicine depends on whether you have an existing in-person practice. If so, all you need is videoconferencing capability. For practices using exclusively telemedicine, physicians have two general options:

  1. Purchase an “all-in-one” technology that incorporates videoconferencing, documentation, and billing capabilities.
  2. Use a simple videoconferencing platform plus other software and technologies for charting, billing, and other elements.

There are also products such as Chiron Health that integrate with existing medical records.

Physician-owned, cash-pay telemedicine practices come with all the responsibilities of running a business. But the upside is that there is no upper limit on how much you can earn. You can manage your practice in a way that best suits your interests and lifestyle.

Employment by a company who provides telemedicine services

Full-time employment is an option for physicians who enjoy both virtual care and the technologies that support it.

There are options for full-time work that involve almost exclusively patient care via telemedicine, as well as jobs that are much broader in their responsibilities. A medical director position with a telemedicine company may, for example, work with IT staff to improve the company’s technology, develop clinical workflows, and train physician consultants.

There are also organizations that utilize telemedicine as just a portion of a larger set of services that they provide. I previously worked full-time for a company that provided healthcare services in county jails. They used telemedicine to deliver care in facilities located in remote areas and for patients needing to see certain types of specialists. It wasn’t a telemedicine company, per se, but they enhanced their services greatly by utilizing telemedicine.

Physicians interested in this type of work can consider applying for jobs with health insurance companies, government contractors, and academic medical centers that use telemedicine, such as the Arizona Telemedicine Program.

Hybrid and alternative models for earning income with telemedicine

The methods for telemedicine reimbursement described above are not mutually exclusive. Telehealth is an evolving field, and new concepts in how it is practiced and reimbursed are changing all the time.

Given this, there are other arrangements that can be lucrative for physicians. HealthTap – a telemedicine platform that I’ve written about previously – is an example of a company that offers somewhat of a hybrid of consulting and owning your own telemedicine practice. HealthTap physicians can treat patients as a consultant and receive a flat reimbursement per patient, or can use the HealthTap platform for a customized practice in which they set their own fees and acquire their own patients.


The take-home message here is that telemedicine reimbursement is not simple and is not a single concept. There are multiple ways that physicians can earn income and help patients through the use of telehealth technologies.

For any physicians interested in getting started in telemedicine, it’s worth considering the factors of your current situation as well as your long-term goals. As you do so, here are a couple inspiring examples of physicians who’ve cultivated telemedicine practices in their specialty fields:

Have you started a successful telemedicine practice or been successful as a consultant for a telehealth company? I’d love to hear about it – leave a comment below!

1 thought on “Telemedicine reimbursement and all the ways physicians can earn income from telemed work”

  1. I always thought teleradiology would be a great way to wind down my career if I still needed some income after I finally stop working at my current practice.

    The biggest issue as you mentioned is the cost of maintaining a license in multiple states (I haven’t done research much into this yet but I thought there was a way to get a multi state license for teleradiology so you don’t have to keep track of individual license expirations etc).

    I’m hoping that malpractice insurance would also be fully be provided by the Teleradiology companies.

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