Telemedicine applications, i.e. the use of telecommunication technologies to deliver health services over a distance, have demonstrated dramatic growth over the past decade. Reimbursement has emerged as a crucial issue as projects attempt to evolve from the demonstration stage to a mainstream component of health delivery. Payors around the world, both public and private, are currently evaluating telemedicine and making funding decisions. As summarized in this article, conclusive evidence regarding the clinical and/or cost effectiveness of telemedicine does not support generalizations regarding outcomes for telemedicine. However, further discussion in this paper demonstrates that this may not preclude payors from deciding to reimburse for services delivered via these technologies. Research from the US and the UK points to other significant historical contributors toward payor reimbursement decisions, such as consumer and market demand and payor mission.