Does Telehealth Raise Costs? What the Research and Rules Say

One of the oldest objections to telehealth is that it adds care rather than replacing it. If a video visit is easy, the worry goes, patients will book more of them, then still come in person, and total spending will climb. Policymakers have used that concern to justify keeping Medicare's telehealth rules temporary.

Several years of pandemic-era data now let researchers test that worry directly. This article looks at two large, named studies, what they found and what they could not show, and then at the policy deadlines telehealth businesses are actually working with in late 2026.

Study 1: national claims data, 2019 to 2023

In May 2026, JAMA Network Open published a UCLA-led study titled "Telemedicine Adoption, US Ambulatory Visits, and Total Medical Spending, 2019-2023." The lead author was Dr. John Mafi of UCLA's David Geffen School of Medicine.

What they looked at. Multi-payer claims for more than 3 million US adults with continuous coverage through traditional Medicare, Medicare Advantage, dual Medicare and Medicaid eligibility, or commercial insurance. The researchers compared regions with high telemedicine adoption to regions with low adoption, from January 2019 through December 2023.

What they found. Regions with the highest adoption had 2.4% fewer total visits and 0.5% lower total spending than low-adoption regions. Neither difference was statistically significant. According to UCLA's release, the confidence intervals did rule out large changes in either direction, so if telemedicine moved visits or spending, the effect was modest.

Subgroups. None of the subgroup differences were statistically significant either, but they did point in different directions. Rural areas showed slightly more visits and spending, while urban areas showed slightly less. Commercially insured and traditional Medicare groups showed small increases in spending, while Medicaid, dual-eligible and Medicare Advantage groups showed small decreases.

Limits. The authors noted that the design cannot prove cause and effect, that results may not apply to uninsured people, and that the data stop in late 2023. The study also did not measure quality of care or health outcomes.

Study 2: traditional Medicare, 2019 to 2022

An earlier study, published in Health Affairs in April 2024 by Carter Nakamoto, David Cutler, Nancy Beaulieu, Lori Uscher-Pines and Ateev Mehrotra, took a different approach. It followed about 5.5 million traditional Medicare beneficiaries assigned to 576 health systems and compared systems in the top quarter of telemedicine use with those in the bottom quarter.

What they found, comparing 2021 to 2022 against 2019:

Measure	High-telemedicine systems vs low
Total outpatient visits	2.2% higher (0.21 more visits per patient per year)
Emergency department visits	2.2% lower
Spending per patient	1.6% higher (about $248 per patient per year)
Hospitalizations and preventive care	No clear difference
Medication adherence (metformin, statins)	Increased

So this study did find a small increase in visits and spending, alongside fewer emergency visits and some quality signals moving in a good direction.

Reading the two studies together

The studies do not say exactly the same thing, and that is useful. They used different populations (all payers versus traditional Medicare), different comparisons (regions versus health systems) and different time periods.

The fair summary is narrower than the headlines:

Neither study found the large surge in visits or spending that critics predicted.
One found effects that were not statistically distinguishable from zero. The other found small increases in visits and spending.
Neither can tell you what will happen in a specific practice or with a specific service line. A direct-to-consumer cash-pay model, for example, looks very different from a health system adding video visits for existing patients.

For a business case, these studies are best used as context, not as a promise that telehealth will reduce your costs or a patient's costs.

Where Medicare telehealth rules stand

The pandemic-era Medicare telehealth flexibilities have survived on a series of short extensions, and two of those deadlines were missed in 2025 and 2026:

October 1, 2025. The flexibilities lapsed when the federal government shut down.
November 12, 2025. The bill that ended the shutdown restored them through January 30, 2026, and CMS said it would pay claims as if the lapse had not happened.
January 31, 2026. They lapsed again during a short partial shutdown.
February 3, 2026. The Consolidated Appropriations Act, 2026 (H.R. 7148) was signed, extending most flexibilities through December 31, 2027.

According to Baker Donelson's summary, the extension keeps the patient's home as an eligible location without geographic limits, allows audio-only services, keeps the expanded list of practitioners who can bill for telehealth (such as physical therapists and mental health counselors), lets federally qualified health centers and rural health clinics provide telehealth, and continues to waive the in-person visit requirement for telemental health. It also extends Medicare's Acute Hospital Care at Home program through September 30, 2030.

Unless Congress acts again, the older statutory limits, including rural location requirements, would apply again after December 31, 2027. Practices that serve Medicare patients often plan around that date rather than assuming another extension.

Where DEA prescribing flexibilities stand

Prescribing controlled substances by telemedicine is governed separately, by the DEA and HHS. On December 31, 2025, they published a fourth temporary extension of the COVID-era telemedicine flexibilities. It runs from January 1, 2026 through December 31, 2026.

Under the extension, DEA-registered practitioners may prescribe Schedule II to V controlled substances by telemedicine without first seeing the patient in person, as long as the rule's conditions are met. Those include a legitimate medical purpose, use of an interactive telecommunications system, and a DEA registration that covers the prescribing.

A permanent framework may be close. McDermott reported that the DEA sent a final telemedicine special registration rule to the White House Office of Management and Budget for review on August 25, 2026. As of that September 2026 report, the rule's text was not public, so its terms are unknown.

With the extension ending on December 31, 2026, any telehealth business that prescribes controlled substances should be watching for a further extension or for permanent DEA rules, and planning with counsel for both outcomes.

Practical takeaways for telehealth businesses

Use research carefully in investor decks and marketing. Cite the study, describe what it measured, and avoid turning "no significant increase in spending" into "telehealth saves money."
Track the payer mix. Medicare rules, commercial contracts and state laws each set their own limits.
Put the key dates on a calendar: December 31, 2026 for the DEA extension and December 31, 2027 for the Medicare flexibilities.
Build operations that can absorb a lapse. The 2025 and 2026 lapses showed that deadlines can pass before Congress acts.

Where NutriCove fits

NutriCove helps founders launch telehealth companies, including brand and platform build, with entity structure coordinated with the founder's healthcare counsel, plus provider agreements and BAAs. Reimbursement and prescribing rules remain questions for your counsel and billing advisors. If you are planning a launch, see how the telehealth launch service works.

Sources

This article is general information, not legal or medical advice. Talk to a qualified attorney or licensed professional about your situation.