How telehealth counts toward network adequacy

First, what network adequacy measures

Medicare Advantage network adequacy, governed by 42 CFR 422.116, tests whether your contracted network puts enough of each provider and facility type within reach of your members. CMS classifies every county into one of five designations — Large Metro, Metro, Micro, Rural, or Counties with Extreme Access Considerations (CEAC) — and sets a maximum time and distance for each specialty type in each designation. The plan submits Health Service Delivery (HSD) provider and facility tables listing its contracted providers, and CMS checks how much of the beneficiary population falls inside those standards.

The threshold is a coverage percentage. For most specialty and facility types, CMS requires that a set share of beneficiaries in the county have access to at least one provider of that type within the standard: 90 percent in Large Metro and Metro counties, and 85 percent in Micro, Rural, and CEAC counties. Miss the threshold for a specialty in a county, and that cell of your network fails unless you have a credit or an approved exception. The telehealth credit is one of the tools CMS provides to help you clear that bar.

The 10-percentage-point telehealth credit, defined

Here is the mechanism precisely. For eligible specialty types, if your contracted network includes one or more telehealth providers of that specialty that furnish additional telehealth benefits, CMS awards a 10-percentage-point credit toward the percentage of beneficiaries who count as having access within the time-and-distance standard for that specialty type in that county. It is a credit against the coverage percentage, not a waiver of the whole requirement.

Work the arithmetic and the design intent becomes clear. If your in-person network covers 82 percent of beneficiaries for an eligible specialty in a Large Metro county — 8 points short of the 90 percent standard — the 10-point telehealth credit closes the gap and you pass. If your in-person network covers only 55 percent, the credit brings you to 65 percent and you still fail by a wide margin. The credit is calibrated to help a network that is close, not to rescue a network that barely exists. That calibration is the whole point, and it is why telehealth cannot substitute for real presence.

Which specialty types qualify

The credit is not available for every specialty. CMS limits it to a defined list of specialty types where telehealth is a clinically credible mode of care — largely evaluation-and-management specialties rather than those requiring hands-on procedures or on-site facilities. The eligible list has included specialties such as the following.

• Dermatology
• Psychiatry
• Cardiology
• Otolaryngology
• Neurology
• Ophthalmology
• Allergy and Immunology
• Nephrology
• Primary Care
• Gynecology / OB-GYN
• Endocrinology
• Infectious Diseases
• Clinical Psychology
• Clinical Social Work
• Outpatient Behavioral Health (facility type, effective January 1, 2025)

Behavioral health and the newest eligible type

The behavioral-health additions are worth pausing on because they reflect where CMS has pushed hardest. Clinical psychology and clinical social work were brought into the credit-eligible list, and effective January 1, 2025, CMS added Outpatient Behavioral Health (OBH) as a facility-specialty type in the adequacy evaluation — with the 10-point telehealth credit available for OBH as well. This mirrors a broader regulatory recognition that behavioral health access is both critically short and unusually well suited to telehealth delivery.

For plans building D-SNP and dual-eligible products, this matters. Behavioral health is frequently the hardest cell to fill with in-person providers, and it is also where telehealth carries the most legitimate clinical weight. The credit lets you responsibly account for real telehealth access in exactly the area where in-person supply is thinnest — provided the telehealth providers are genuinely contracted and delivering additional telehealth benefits, not names on a table.

Telehealth as access versus telehealth as a shortcut

This is the distinction that separates a defensible network from a fragile one. Telehealth as access means real, contracted, reachable virtual care that members actually use — a legitimate mode of delivery that expands what your network can do. Telehealth as a shortcut means citing a telehealth arrangement on paper to clear an adequacy cell where in-person care is genuinely absent and members will still struggle to be seen.

CMS built guardrails against the shortcut, and they are structural rather than merely aspirational. The credit is capped at 10 points, so it cannot rescue a badly deficient cell. It applies only to enumerated specialties, so procedure-heavy and facility-dependent care cannot lean on it. And it requires that the telehealth providers be contracted network providers furnishing additional telehealth benefits — not a generic virtual vendor bolted on for the application. Even where the credit lets you pass on paper, the member experience is what ultimately governs your grievances, appeals, and Star Ratings. A telehealth arrangement that members cannot actually use will surface as a problem long after the adequacy review is over.

How Medicaid and the Marketplace treat telehealth differently

The MA telehealth credit is a federal Medicare Advantage construct. It does not automatically carry over to other lines of business, and assuming it does is a common and costly error for multi-product plans. State Medicaid managed care programs set their own network adequacy standards, and their treatment of telehealth varies widely — some states grant explicit telehealth credit or allowances, others count telehealth only in defined circumstances, and others require in-person capacity regardless. If you run a D-SNP alongside a Medicaid plan, you are living under two different rulebooks in the same counties.

On the ACA Marketplace side, qualified health plan network adequacy is built on time-and-distance and appointment-wait-time standards, and telehealth's role is defined by the applicable federal or state Marketplace rules rather than by the MA credit. The practical takeaway is that telehealth strategy has to be mapped product by product and state by state. A telehealth partner that earns you a credit in Medicare Advantage may earn you nothing toward a Medicaid or Marketplace adequacy determination in the same market — so the network you can build on telehealth differs by line even when the geography does not.

Using telehealth honestly in a build

Used correctly, the telehealth credit is a legitimate and valuable tool. Used to hide a hole, it is a liability that surfaces as access complaints, corrective action, and reputational damage. The disciplined path is to build the strongest in-person network you can first, apply the telehealth credit to close residual gaps in eligible specialties, and treat any cell that relies on telehealth to pass as a flag for continued in-person recruitment rather than a solved problem.

• Build in-person first; use telehealth to close the last mile, not the whole road.
• Confirm each specialty you are crediting is on the CMS eligible list for the current contract year.
• Contract telehealth providers as genuine network providers delivering additional telehealth benefits — verifiable on your HSD tables.
• Flag every adequacy cell that passes only because of the credit, and keep recruiting in-person supply there.
• Map telehealth treatment separately for each Medicaid and Marketplace product; never assume the MA credit transfers.
• Track real telehealth utilization, because the member experience — not the application — determines your grievances and Star performance.

The bottom line

Telehealth counts toward Medicare Advantage network adequacy in a deliberate, bounded way: a 10-percentage-point credit for enumerated specialties, designed to help a nearly adequate network cross the line without letting a thin network fake it. Understand the boundary, and telehealth becomes one of the most useful instruments in a build. Ignore it, and you either leave legitimate coverage on the table or lean on the credit in ways that will not survive contact with real members.

We help plans use the credit for what it is — a precise assist grounded in real, contracted virtual care — and we make sure the network underneath it is one members can actually reach. That is the difference between a network that passes and a network that works.