This paper presents an overview of the methodology used for evaluation of the effectiveness of a Telerehabilitation system, and an analysis of the empirical data generated by the evaluation. The TeleRehab™ telemedicine system evaluated at INTEGRIS-Health in Oklahoma is an innovative combination of modern information and medical diagnostic technology with tradition treatment and therapy techniques in the domain of medical rehabilitation. Physicians, therapists, and care recipients were directly involved in this 1 year long study which covered nearly 3,400 patient interventions. Because of the geographic location of the care recipients associated with this study, the evaluation was focused primarily on determination of cost savings relative to traditional face-to-face encounters, and patient satisfaction with Telemedicine. Although the evaluation results presented in the paper are not based on Randomized Clinical Trials (RCT), the results are convincingly positive in favor of Telemedicine.