Telehealth Documentation: Pass the CMS Audit (42 CFR § 410.78(c))

Medicare telehealth audits frequently focus on documentation rather than intent. While 42 CFR § 410.78(c) clarifies that a telepresenter is not required unless medically necessary, the broader telehealth regulation establishes detailed documentation, technology, and patient-location standards that CMS evaluates during post-payment reviews. For small practices, consistent documentation tied directly to the regulatory elements is essential to prevent denials and recoupments. This article presents a structured documentation checklist aligned with 42 CFR § 410.78, designed to help small clinics withstand CMS audit scrutiny.

Telehealth is now a routine component of care delivery, but Medicare oversight of telehealth claims has intensified as pandemic-era flexibilities expired. CMS audits do not assess whether telehealth was convenient or well-intentioned; they assess whether documentation demonstrates compliance with 42 CFR § 410.78.

Section 410.78(c) is often misunderstood as a documentation safe harbor. In reality, it removes only one requirement, the presence of a telepresenter, while leaving all other telehealth conditions intact. Small practices that rely on brief or inconsistent notes often fail to demonstrate compliance with technology standards, originating site rules, or modality requirements, creating repayment risk. This article translates the regulation into a practical documentation framework suitable for limited-resource practices.

Understanding Documentation Expectations Under 42 CFR § 410.78(c)

Section 410.78(c) states that a telepresenter is not required as a condition of payment unless medically necessary. However, CMS audits examine compliance with the entire section, including definitions and conditions found in § 410.78(a)–(f).

From a documentation perspective, CMS reviewers typically verify that the medical record demonstrates:

• Use of an interactive telecommunications system as defined in the regulation

• The patient’s originating site/location at the time of service

• The modality used (audio-video or audio-only) and justification when audio-only applies

• The clinical appropriateness of telehealth for the encounter

• Correct coding and modifiers, when required

The absence of any one of these elements can result in denial, even if the service itself was clinically appropriate.

Interactive telecommunications system

Medicare telehealth generally requires real-time, two-way audio and video communication. Documentation should clearly indicate that audio-video technology was used.

Audio-only documentation (limited exception)

Audio-only telehealth is permitted only when:

• The practitioner is capable of furnishing audio-video telehealth

• The patient is not capable of, or does not consent to, video use

Documentation must explicitly state why video was not used. Claims must also include required modifiers.

Required modifiers for audio-only services

• CPT modifier 93

• Medicare modifier FQ (for RHCs and FQHCs, when applicable)

CMS requires documentation of where the patient was physically located at the time of the telehealth encounter.

Key documentation principles:

• The location must be explicitly stated (for example, “patient located at home in [state]”)

• The location must qualify as an originating site for the service billed

• The patient’s home qualifies only in defined circumstances, such as certain mental health services, substance use disorder treatment, or ESRD-related services

Failure to document patient location is a frequent audit finding.

For telehealth services furnished to a patient in the home for the diagnosis, evaluation, or treatment of a mental health disorder, documentation must reflect the applicable in-person visit timing requirement.

Through December 31, 2024

Documentation must show:

• An in-person visit within 6 months prior to the initial telehealth service

• An in-person visit at least once within 12 months of subsequent telehealth services, unless an exception is documented

On or after January 1, 2025

Documentation must show:

• An in-person visit within 6 months prior to the initial telehealth service

• An in-person visit within 6 months of each subsequent telehealth service

If an exception applies, the medical record must clearly document the practitioner’s and patient’s determination that in-person care would pose greater risk or burden.

Step-by-Step Telehealth Documentation Checklist

Step 1: Use a standardized telehealth note header

At the top of every telehealth note, document:

• Patient location at time of service

• Modality used (audio-video or audio-only)

• Confirmation that telehealth was clinically appropriate

Step 2: Capture patient consent

Document informed consent for telehealth, including whether consent was written or verbal and the date obtained.

Step 3: Document modality justification

If audio-only was used, document:

• Why video was not used

• Why audio-only was clinically appropriate

Step 4: Record clinical content comparable to in-person care

Notes should include history, assessment, and plan sufficient to support the level of service billed.

Step 5: Apply and document required modifiers

Ensure documentation supports the use of any telehealth or audio-only modifiers appended to the claim.

Step 6: Track mental health in-person visit timing

For applicable services, document the date of the last in-person visit and confirm compliance with timing rules.

• Telehealth service is on the Medicare Telehealth Services List

• Patient location is documented and qualifies as an originating site

• Modality is clearly documented

• Audio-only justification is present when applicable

• Required modifiers are supported by documentation

• Mental health in-person timing requirements are met and recorded

CMS

CMS enforces Medicare payment rules under 42 CFR § 410.78 and conducts post-payment reviews to confirm documentation supports billed telehealth services.

OCR

The Office for Civil Rights enforces HIPAA privacy and security requirements related to telehealth platforms and data protection. OCR does not enforce Medicare payment rules but may investigate privacy issues identified during telehealth audits.

Common Documentation Pitfalls

• Missing patient location entries

• Using audio-only without documenting why video was not used

• Failing to document telehealth consent

• Applying outdated mental health timing standards

• Inconsistent modifier use unsupported by the medical record

Small practices can reduce audit risk by embedding telehealth documentation requirements into daily workflows. Standardized templates, brief monthly self-audits, and clear accountability for telehealth compliance help ensure documentation remains consistent even as staff and workflows change.

Section 410.78(c) eliminates the telepresenter requirement in most cases, but it does not reduce Medicare’s expectations for telehealth documentation. CMS audits focus on whether the record demonstrates compliance with technology, location, modality, and clinical appropriateness requirements. A repeatable documentation checklist aligned with 42 CFR § 410.78 is essential for protecting revenue and demonstrating good-faith compliance.

Compliance should be a living process. By leveraging a regulatory tool, your practice can maintain real-time oversight of requirements, identify vulnerabilities before they escalate, and demonstrate to both patients and payers that compliance is built into your culture.

• 42 CFR § 410.78 Telehealth services

• CMS Telehealth Review Criteria & Telehealth Services List

• CY 2024 Physician Fee Schedule Final Rule