Medicaid Telehealth Billing Surge: Before vs. After COVID-19

Medicaid's telehealth billing landscape was transformed by the COVID-19 pandemic in ways that few policy analysts fully anticipated — and the data now available through 2024 reveals a story far more complex than a simple spike-and-retreat. What began as an emergency workaround to keep vulnerable Medicaid beneficiaries connected to care has calcified into a permanent structural shift in how providers bill, how patients access services, and where federal and state dollars flow. Understanding the magnitude of that shift — and which providers, codes, and specialties drove it — is essential for anyone tracking Medicaid program integrity, access equity, or long-term fiscal sustainability.

The Pre-COVID Baseline: A Modest, Volatile Market

Before the pandemic, telehealth billing under Medicaid was a niche activity. Monthly total spending on telehealth-specific HCPCS/CPT codes hovered in a narrow band, ranging from roughly $20,685 in March 2018 to $70,123 in January 2019 — a figure that itself represented a sharp 74.15% month-over-month jump, suggesting early organic growth even before any emergency policy changes.

The volatility in this period is striking. Month-over-month spending swings ranged from -40.3% (February to March 2018) to +31.94% (July to August 2018), with no clear directional trend. Claims counts were similarly erratic, oscillating between roughly 4,091 and 7,286 per month across 2018 and 2019. This was not a market building toward a predictable inflection point — it was a fragmented, underutilized billing category that most Medicaid providers barely touched.

The unique beneficiary counts tell a similar story. Even at peak pre-COVID months, fewer than 5,231 unique beneficiaries were accessing telehealth services in any given month. For a program serving tens of millions of Americans, this was a rounding error.

The Pandemic Inflection: Who Captured the Surge?

When COVID-19 forced the Centers for Medicare & Medicaid Services to rapidly expand telehealth flexibilities in March 2020 — waiving geographic restrictions, broadening eligible provider types, and allowing audio-only visits — the effect on Medicaid billing was immediate and dramatic. The provider-level data from the pre-COVID baseline (2018 through February 2020) compared to the peak pandemic period (April 2020 through December 2021) reveals which organizations were positioned to capture — or rapidly pivot toward — this new billing environment.

The Absolute Dollar Leaders

The largest absolute increases in telehealth-related payments were concentrated among large organizational providers, predominantly in New York and Maryland.

City Medical of Upper East Side, PLLC stands out as the single largest absolute gainer, adding over $106 million in telehealth-related payments during the pandemic peak — a 158.7% increase over its already substantial pre-COVID baseline. Its claim count grew from 558,536 to 1,553,875, suggesting this was not simply a rate increase but a massive expansion in service volume.

The Percentage Outliers: Near-Zero to Massive Scale

Perhaps more analytically significant are the providers who entered telehealth billing from a near-zero baseline and scaled to tens of millions of dollars in payments during the pandemic. These cases raise important questions about program integrity and the speed at which new billing patterns can emerge.

Chinatown True Care Medical PLLC's trajectory is particularly striking: from $3,084 in pre-COVID telehealth payments across just 39 claims, to $17.5 million across 190,873 claims during the pandemic peak — a 566,629% increase. The University of Texas Medical Branch at Galveston shows a similarly dramatic pattern, scaling from $10,681 and 260 claims to $16.4 million and 225,434 claims, a 153,800% increase. Whether these patterns reflect legitimate access expansion to underserved populations or billing anomalies warranting scrutiny is a question the data alone cannot answer — but the magnitude demands attention from program integrity analysts.

It is also worth noting the geographic concentration of the top absolute gainers: New York and Maryland dominate the list, reflecting both the early severity of COVID-19 in those states and the density of large organizational providers capable of rapidly scaling telehealth operations.

Post-Pandemic Persistence: Did Telehealth Stick?

The most consequential policy question for Medicaid's long-term fiscal trajectory is whether telehealth utilization reverted toward pre-COVID baselines once the Public Health Emergency (PHE) ended in May 2023, or whether the pandemic permanently restructured care delivery patterns. The procedure-code-level data through 2024 provides a clear answer: for behavioral health services in particular, the elevated utilization has largely held.

Psychotherapy Codes: A Permanent Structural Shift

The 30-minute, 45-minute, and 60-minute psychotherapy codes (90832, 90834, and 90837) tell a remarkably consistent story of sustained post-pandemic elevation.

CPT 90832 — Psychotherapy, 30 Minutes

For CPT 90832, total payments grew from $181.5 million in 2018 to $677.1 million in 2022 — a nearly fourfold increase. Crucially, 2023 spending of $666.7 million remained nearly identical to the 2022 peak, suggesting that the PHE expiration did not trigger the reversion many analysts expected. The 2024 figures show some moderation, but the active provider count of 8,698 remains dramatically higher than the pre-COVID baseline of 5,971 to 7,039.

CPT 90834 — Psychotherapy, 45 Minutes

The 45-minute psychotherapy code tells an even more striking story. Total payments actually increased from $1.53 billion in 2022 to $1.62 billion in 2023 — the highest level in the entire dataset — driven by both sustained claim volume and rising average payments per claim ($86.12 to $90.70). The average payment per claim has risen continuously from $62.01 in 2018 to $97.24 in 2024, reflecting both rate changes and potential shifts in the complexity of billed services.

The average beneficiaries per provider metric adds important nuance. For CPT 90832, this figure peaked at 720.7 in 2021 before declining to 477.0 in 2024 — still below the 2021 peak but well above the 2018 baseline of 510.9. For CPT 90834, the 2023 figure of 645.2 beneficiaries per provider remains above the pre-COVID baseline of 562.5 to 572.8, suggesting that providers who entered telehealth during the pandemic have retained meaningful patient panels.

The Rate Increase Dimension

One underappreciated aspect of the post-pandemic data is the persistent increase in average payment per claim across all three psychotherapy codes. For CPT 90837 (60-minute psychotherapy), the average payment rose from $72.23 in 2018 to $85.22 during the COVID peak — a 18% increase in the per-claim rate even as claim volumes fluctuated. This pattern likely reflects a combination of state Medicaid rate adjustments, changes in the mix of billing modifiers, and the shift toward audio-only visits, which some states reimburse at different rates than video-based telehealth.

Key Takeaways

1. The pre-COVID telehealth market was genuinely small. Monthly spending on telehealth-specific codes rarely exceeded $70,000 before 2020, and beneficiary reach was limited to a few thousand individuals per month. The pandemic did not accelerate an existing trend — it created a fundamentally new one.

2. The pandemic surge was dominated by large organizational providers in a handful of states. New York and Maryland organizations captured the majority of absolute dollar increases, with some providers scaling from negligible pre-COVID telehealth billing to tens of millions of dollars in pandemic-period payments. The percentage-increase outliers — including providers that grew by hundreds of thousands of percent — warrant ongoing program integrity scrutiny.

3. Behavioral health telehealth has not reverted. Psychotherapy codes 90832 and 90834 show 2023 spending levels essentially equal to or exceeding 2022 peaks, with active provider counts remaining dramatically above pre-COVID baselines. The PHE expiration did not produce the utilization cliff that some analysts predicted.

4. Per-claim payment rates have risen continuously. Average payments per claim for all three psychotherapy codes are higher in 2024 than at any pre-COVID point, suggesting that the cost of each telehealth encounter — not just the volume — has structurally increased.

5. The 2024 moderation bears watching. While 2023 data showed sustained elevation, 2024 figures for both CPT 90832 and 90834 show meaningful declines in total claims and beneficiaries per provider. Whether this represents the beginning of a genuine normalization, a data lag, or a response to specific state policy changes will be a critical question for 2025 and 2026 Medicaid budget projections.

For policymakers, the central challenge is now distinguishing between telehealth expansion that genuinely improved access for underserved Medicaid beneficiaries — a legitimate and desirable outcome — and billing patterns that exploited emergency flexibilities without commensurate patient benefit. The data presented here can identify the scale and distribution of the shift; determining which category any given provider falls into requires the kind of claims-level audit work that Medicaid program integrity units are only beginning to undertake at scale.