In the last five years, home health agencies have become increasingly interested in telemedicine as a potential means to meet the future healthcare needs of their aged and chronically ill clientele. This case study examines the organizational and environmental conditions that affected the implementation of a telemedicine program in one rural home healthcare organization. Several factors restricted the utilization of telemedicine, including Medicare's Prospective Payment System and corresponding documentation (Outcome Assessment and Information Set), the organization controlling grant funding for the program, and several environmental factors. Findings suggest that in rural communities, older homecare patients may have less opportunity to benefit from telemedicine. The study demonstrates the importance of environmental and organizational factors when implementing a telemedicine program. Recommendations are offered for home healthcare organizations considering development of telemedicine programs.