How to run a virtual IOP in Texas: the telehealth rules, billing and what payers want

The short answer: yes, a Texas substance use IOP can run by video, but only as a licensed chemical dependency treatment facility working within 26 TAC 564.911. That means verifying the client's identity at the start of every session, recording verbal consent for each electronic service, giving written risks before the first one, and allowing audio-only counseling only with an existing clinical relationship and a documented reason. State-regulated health plans can't refuse a covered service just because it was delivered by telehealth (Texas Insurance Code chapter 1455), but each plan sets its own rules for a virtual program day. Medicare pays for IOP only through hospitals, CMHCs and a few other provider types. Use a video platform that signs a business associate agreement, and put the client's location in every note.

1. You still need the license and a physical site

Telehealth changes how services are delivered, not whether the program has to be licensed. In Texas, a program that treats substance use disorders needs HHSC's chemical dependency treatment facility (CDTF) license under Health and Safety Code chapter 464. The telehealth rule, 26 TAC 564.911, sits inside the licensing chapter: it tells a licensed program how to deliver its services electronically. It isn't a separate path to operate without one.

• The license is tied to a location. HHSC inspects a site, and the records rules still apply: active records stored at the facility, originals kept in Texas, a reliable backup (26 TAC 564.508).
• Payers want a physical service address. Plans list a street address for the program, most won't accept a PO box, and many won't list a virtual office. A video-only program still needs a real location for the license and the contracts.
• Mental-health-only virtual IOPs raise a different licensing question, because the CDTF license only fits substance use treatment. Read licensing a mental health IOP or PHP in Texas before you build one.

If you're starting from scratch, the order is the same as for an in-person program: plan, site, license, policies, staff, contracts. How to start an IOP in Texas walks through it, and the telehealth pieces below go into the policy manual and the intake packet.

2. What 26 TAC 564.911 requires for every electronic service

HHSC amended the electronic-services rules in February 2024 (49 TexReg 871), before the chapter moved from 25 TAC 448 to 26 TAC 564. That's why the text still refers to "§448.911" in places. HHSC's guidance letter GL 21-3004-A2 (May 2024) explains the changes. These are the requirements we audit every telehealth chart against:

Requirement	Rule	What proves it in the chart
Verify who the client is at the start of each session (name, password or PIN)	564.911(f)(1)	A line in each note: identity verified, and how
Verbal consent to each electronic service, documented in the record. Without it, the service is in person	564.911(s)–(u)	A consent statement in every telehealth note, not one form at admission
Written risks (clinical, security and confidentiality) given before electronic services begin	564.911(r)	A signed telehealth risk disclosure, once per episode
Audio-only counseling only with an existing clinical relationship (an in-person or video service from the same provider in the prior 6 months), verbal consent before each session, and the specific reason audio-only was used	564.911(a)(2), (k)	Modality in the note, the reason, and the earlier video or in-person service
Who provides it: a qualified credentialed counselor (QCC), or an intern with more than 2,000 supervised hours (or a waiver) who has passed the LCDC exam	564.911(d)	Staff roster; intern hours and exam result in the personnel file
Client information: fraud monitoring, verbal-consent documentation and HIPAA technology explained; emergency contact information given; access to Chapter 564, HSC chapter 464 and 42 CFR Part 2	564.911(v), (x), (y)	A telehealth information acknowledgment in the intake packet
Adolescents served separately from adults, with identities verified	564.911(w)	Separate video groups; rosters with no adults in teen groups
Part 2 compliance for the telehealth program	564.911(h)	The same Part 2 notice and consents as in person

Screening and assessment by video have their own conditions (564.801(h) and 564.803(b)): synchronous audio and video, and audio-only only during a declared disaster in the county, with a written justification and the person's verbal consent. Interns, LPC Associates and LMSWs doing them need more than 2,000 supervised hours. HHSC also declined to let counselor interns provide telehealth before passing the licensing exam (Texas Register, February 16, 2024).

The easy miss: one telehealth consent form at admission doesn't meet 564.911(s)–(u), which asks for verbal consent to each electronic service. Our chart audit flags a telehealth note without it as a major finding. Build the sentence into the note template so it can't be skipped. Our plain-English map of 26 TAC 564 has the rest of the chapter.

3. Where the client is decides whose rules apply

A Texas license covers clients who are physically in Texas at the time of the session. That gets harder in a group than in individual therapy:

• Every member, every session. Confirm and document each client's location at the start of group. A client logging in from Oklahoma that day is in Oklahoma, so Oklahoma's rules apply to that client.
• A group facilitator needs authority everywhere the group is. If one member is out of state, the clinician needs that state's license or permission, or the client joins only when back in Texas. Write the answer into policy so staff aren't deciding it at 6 p.m.
• Counselors have no compact Texas belongs to. Texas hasn't joined the Counseling Compact or the social work compact, and LCDCs have no interstate privilege. Our Texas telehealth guide has the license-by-license table.
• Prescribers treating clients located in Texas, including by video, need a Texas license. For controlled substances, including buprenorphine, DEA's telemedicine flexibilities are extended through December 31, 2026 (Federal Register). See psychiatric services in an IOP.

4. Texas telehealth law and insurance parity

• Same standard of care. Texas Occupations Code chapter 111 defines a telehealth service as one delivered by a Texas-licensed professional, within that license, to a patient at a different location. Telehealth is held to the same standard of care as in-person care.
• Coverage parity, for state-regulated plans. Under Texas Insurance Code chapter 1455, a state-regulated plan can't exclude a covered service from a contracted provider only because it was delivered by telehealth. The Center for Connected Health Policy's Texas summary notes the law doesn't require plans to cover audio-only calls. Self-funded employer plans follow federal rules, not chapter 1455.
• Parity isn't a payment guarantee. The plan can still require prior authorization, apply its medical-necessity criteria and set documentation rules for a virtual day. Read the plan's telehealth policy and your contract.

5. Medicare and virtual IOP

Medicare pays for PHP only through hospital outpatient departments and community mental health centers. For IOP, which Medicare added in 2024, it adds FQHCs, rural health clinics and an opioid treatment program add-on. A freestanding Texas CDTF can't bill Medicare for a program day, in person or by video. Our Medicare IOP and PHP guide covers who can and why.

• Professional telehealth is a separate benefit. Clinicians enrolled in Medicare can bill their own telehealth services, such as psychotherapy or psychiatric visits. Congress extended the Medicare telehealth flexibilities through December 31, 2027 (Consolidated Appropriations Act, 2026), and the in-person visit Medicare would otherwise require before mental health telehealth is delayed through the same period (CMS telehealth FAQ, October 9, 2026; HHS telehealth policy updates).
• Program days by video: we didn't find a Medicare rule that lets a hospital or CMHC bill a PHP or IOP day delivered by video. If you run a hospital or CMHC program, ask your Medicare administrative contractor in writing before you bill any virtual program day.
• Medicare Advantage plans set their own telehealth and network rules. Ask each one whether it contracts a freestanding program at all, and whether it pays virtual days.

6. Texas Medicaid

Texas made many behavioral health telehealth and audio-only services permanent after the public health emergency under H.B. 4 (2021), where they're clinically appropriate and cost-effective (HHSC Behavioral Health Advisory Committee). HHSC's guidance favors in-person or synchronous video over audio-only, and the person or their legally authorized representative must agree to the modality.

• Modifiers: Medicaid plans have told providers to bill audio-only behavioral health services, including the substance use codes H0001, H0004 and H0005, with modifier FQ, and video with 95 (Texas Children's Health Plan). Confirm with each plan's current billing guide.
• Medicaid IOP is a plan decision. Adult PHP and IOP reach Medicaid members mainly as in-lieu-of services each managed care plan may choose to offer, and SUD treatment must be delivered in a licensed CDTF. Ask each plan in writing whether it pays virtual IOP days. See Texas Medicaid for IOP and PHP programs.

7. What commercial payers ask for before they pay a virtual day

There's no single standard, and plans write these rules into medical policies, provider manuals and contract exhibits. Indiana Medicaid is one example of a payer that wrote it down: its 2022 bulletin pays telehealth IOP (H0015, S9480) with place of service 02 or 10 (Indiana Medicaid bulletin BT202239). These are the questions to put to every plan at contracting, with the answer in writing:

Ask the plan	Why it matters
Do you pay IOP (or PHP) days delivered by video? Audio-only?	Plans differ, and chapter 1455 doesn't require audio-only coverage, so ask about each modality separately
Must the camera stay on? Is camera-off time billable?	Where a payer requires video, camera-off time may not count (Indiana Medicaid's guidance says so); your attendance log has to show it
Same hour minimum as in person?	Most plans expect at least 9 hours a week for adult IOP, counting only service time, not breaks or check-in
Which modifier and place of service on our claim form?	95, GT or FQ; POS 02 or 10 on a CMS-1500; a UB-04 has no place-of-service field
Does the authorization have to say telehealth?	If the plan expects the request to say virtual or hybrid, an authorization for an in-person program may not cover video days
Does the virtual track need to be in our contract or program description?	Your facility application described a program; if video days are new, ask whether the plan needs them added
Clients outside Texas?	The plan may pay, but your clinicians still need authority where the client sits

Our guide to insurance contracts for treatment centers covers the facility application. If a plan pays virtual days only by single case agreement, put the modality in the agreement.

8. Place of service and modifiers

The program-day codes don't change for telehealth: H0015 for SUD IOP, S9480 for mental health IOP, S0201 or H0035 for PHP, or revenue codes 0905, 0906, 0912 and 0913 on a UB-04. See IOP and PHP billing codes. What changes is how you show the service was remote:

Situation	CMS-1500	UB-04
Video, client at home	POS 10, modifier 95	No POS field; modifier 95 (or the plan's choice, such as GT) on the line
Video, client elsewhere	POS 02, modifier 95	As above
Audio-only, where covered	POS 10 or 02, modifier 93 (Texas Medicaid plans: FQ)	The plan's audio-only modifier
Hybrid day (some services in person, some by video)	Ask the plan how to code a day that mixes the two, and write the answer in your billing guide	Ask the plan

Medicare pairs POS 02 or 10 with modifier 95 (video) or 93 (audio-only) for professional telehealth claims (CMS change request). For program claims, use each plan's written policy over habit, and record it in your billing guide.

9. Part 2 and HIPAA on video

• The pandemic platform waiver is over. HHS's enforcement discretion for non-compliant video platforms ended with the public health emergency, with a transition period through August 9, 2023 (HHS). Use a platform that signs a business associate agreement, and never a public-facing streaming or social app.
• Part 2 applies to the virtual record the same way. A federally assisted SUD program's records are protected by 42 CFR Part 2 whether the session was in a room or on a screen, and 564.911(h) makes it a licensing requirement. The 2024 Part 2 rule moved it closer to HIPAA; our sister site's Part 2 guide explains what changed.
• Group privacy is the new risk. On video, other people in a client's home can see and hear the group. Have every member confirm they're alone or using headphones, remind the group of its confidentiality rules at the start, and allow no recording, by staff or clients. 564.13 bars recording an activity without releases.
• Display names identify people. Set clients to join with first name or initials, turn off public waiting-room lists, and use a unique meeting link per group, not a standing link that circulates.
• Add telehealth to the HIPAA risk analysis: the platform, staff devices, home networks and where clinicians work from. The HIPAA checklist for behavioral health covers the yearly review.

10. Running the program day by video

Schedule and hours

Only service time counts toward a level's weekly hours. A typical adult IOP runs three days of three hours. The schedule template in our program kit is a 90-minute process group, a 10-minute break that isn't counted, and a 90-minute skills group, with individual sessions by appointment (see IOP schedule templates). On video, log each client's join and leave times. A client who drops for 25 minutes didn't receive those 25 minutes, and the note should say so.

Groups

We didn't find a separate size cap for video groups in 26 TAC 564, so the general limits apply: counseling groups up to 16 clients, and education and life skills groups up to 35 (564.901(b)). Sixteen faces on a screen leaves little time per client in a 90-minute process group, so plan a smaller video group if your outcomes need it. The required health education (TB, HIV, hepatitis, STDs and tobacco, 564.901(d)–(e)) can be delivered by video like any other group.

Drug testing

A virtual program still needs a drug testing policy it can carry out. The options are client visits to the program site or a collection site, or observed testing by video with instant cups, which needs a CLIA certificate of waiver for the site that performs the test. Write down who observes, how the result is recorded, and what happens when a client can't test.

Crisis and safety

• Record each client's street address at the start of every session. If you call 911 from your own phone, you reach your dispatch center, not the client's.
• Keep an emergency contact and the local crisis resources for where the client usually is. Agree in advance what happens if a client discloses risk and then disconnects.
• Telehealth usually isn't appropriate for a client at imminent risk, or who is intoxicated or in significant withdrawal. The admission and continued-stay criteria should say when a client must attend in person or move to a higher level of care.

The telehealth note

The telehealth policy in our program kit has each note record: video or audio-only; the client's location and state; the clinician's location; others present; start and stop times; that verbal consent was given for this session; identity verified; why audio-only was used, if it was; and any technical problem that affected care. In Cima EHR for IOP and PHP, group notes keep one session record with an individual entry for each client, so each client's location and consent go in their own entry.

Or book a free 30-minute call and we'll walk through your model.

11. The virtual IOP checklist

• CDTF license and a physical site; the virtual program described in the operational plan.
• Telehealth policy adopted: platforms, identity, location, licensure, documentation, emergencies, audio-only rules.
• Video platform with a signed BAA; unique links per group; waiting room on; recording off.
• Written telehealth risk disclosure and telehealth information acknowledgment in the intake packet (564.911(r), (v), (x)).
• Note template with identity, location, others present, per-session verbal consent, modality and start and stop times.
• Audio-only allowed only with a prior in-person or video service in 6 months and a documented reason (564.911(k)).
• Staff roster showing who may deliver telehealth: QCCs, and interns only after 2,000+ hours and the exam.
• Adolescent video groups kept separate from adult groups (564.911(w)).
• Each plan's virtual-day rules in writing: coverage, camera, hours, modifier, POS, authorization.
• Drug testing method for remote clients, with a CLIA waiver where cups are read.
• Crisis procedure using the client's address, with local resources on file.
• Telehealth added to the HIPAA risk analysis; staff trained before the first virtual group.

Opening the program with an adolescent track or a co-occurring track as well? See adolescent IOPs in Texas and running a dual diagnosis program.

Questions

Can an IOP be done virtually in Texas?

Yes, by a licensed chemical dependency treatment facility following 26 TAC 564.911: identity verified each session, verbal consent documented for each electronic service, written risks given first, and audio-only counseling only with an existing clinical relationship and a documented reason. Each payer decides whether and how it pays a virtual day.

Do I need a license for a virtual IOP?

For substance use treatment in Texas, yes: the HHSC CDTF license, which is tied to a physical site. The telehealth rule tells a licensed program how to deliver services electronically. A mental-health-only program raises a different licensing question; confirm it with HHSC in writing.

Does insurance cover virtual IOP?

Many plans do, but not all, and the rules vary. Texas Insurance Code chapter 1455 bars state-regulated plans from excluding a covered service only because it was delivered by telehealth, but self-funded employer plans aren't bound by it, and every plan applies its own criteria, authorization and documentation rules. Get each plan's virtual-day policy in writing.

What modifier do you use for telehealth IOP?

Most commercial plans want modifier 95 for video, with place of service 10 (home) or 02 (elsewhere) on a CMS-1500. Texas Medicaid plans use FQ for audio-only behavioral health services. On a UB-04 there's no place-of-service field, so the plan tells you which modifier goes on the line.

Can audio-only sessions count in a virtual IOP?

Under 26 TAC 564.911(k), audio-only counseling is allowed only with an existing clinical relationship, meaning an in-person or video service from the same provider in the prior 6 months, plus verbal consent before each session and a documented reason. Whether a payer pays for it is a separate question, so check each plan's audio-only policy.

Does Medicare pay for virtual IOP?

Medicare pays IOP only through hospitals, community mental health centers, FQHCs, rural health clinics, and opioid treatment programs for an add-on, so a freestanding program can't bill it in any form. We didn't find a Medicare rule allowing a PHP or IOP day by video. Enrolled clinicians can bill their own telehealth visits, extended through December 31, 2027.

Sources

• 26 TAC 564.911 and chapter 564 (Cornell LII); HHSC GL 21-3004-A2, services by electronic means (May 2024)
• Texas Register, adopted rules, February 16, 2024 (electronic services; interns)
• Texas Health and Safety Code ch. 464, Occupations Code ch. 111, Insurance Code ch. 1455; CCHP, Texas telehealth policy
• CMS, telehealth FAQ (October 9, 2026) and change request on POS and modifiers; HHS, telehealth policy updates
• HHSC, H.B. 4 telehealth presentation; Texas Children's Health Plan, audio-only behavioral health billing; Indiana Medicaid, BT202239
• DEA and HHS, fourth temporary extension of telemedicine flexibilities; HHS, telehealth enforcement discretion; eCFR, 42 CFR Part 2

Cima Consulting isn't a law firm and doesn't give legal advice. This page paraphrases the rules; the official text controls.