CMS Proposal Would Restrict Medicare Remote Monitoring Billing to Practice-Employed Clinical Staff

The Trump administration has proposed significant changes to Medicare payment policies that would limit the use of third-party vendors in remote patient monitoring (RPM) and remote therapeutic monitoring (RTM) services. The proposal is included in the Centers for Medicare and Medicaid Services’ (CMS) draft Physician Fee Schedule rule for calendar year 2027 and would take effect on January 1, 2027, if finalized.

Under the proposal, Medicare would only allow payment for RPM and RTM services when they are provided by clinical staff employed by the billing practice. CMS stated that RPM and RTM billing codes could not be used when services are performed by individuals who are not members of the billing practitioner’s clinical staff. As a result, healthcare providers would no longer be able to contract these services to third-party companies for Medicare reimbursement purposes.

CMS said the proposed change is intended to address concerns about program integrity, physician oversight, and the quality of care delivered through some remote monitoring arrangements. The agency cited a September 2024 report from the Department of Health and Human Services Office of Inspector General, which found substantial growth in Medicare RPM usage between 2019 and 2022. According to that report, approximately 43% of beneficiaries receiving RPM services did not receive all three required components of the service.

The use of remote monitoring has continued to grow. A 2025 report found that payments for RPM increased from $408 million in 2023 to $536 million in 2024. During 2024, nearly one million Medicare beneficiaries received RPM services, representing a 27% increase compared with the previous year. CMS noted in the proposed rule that it believes services provided through third-party vendors may not always facilitate all required aspects of RPM and RTM care.

CMS argued that services delivered through third-party contracted clinical staff may not provide sufficient physician involvement or integration with ongoing patient care. Regulators wrote that outsourcing RPM and RTM services can fragment care and reduce oversight by the billing practitioner. The agency also stated that the provision of these services by entities with only a limited connection to the treating practitioner can detract from longitudinal, patient-centered care.

The proposal has drawn criticism from organizations involved in remote monitoring. Christopher Adamec, executive director of the Alliance for Connected Care, said many healthcare providers depend on outside vendors because they lack the infrastructure, technology, and staffing needed to operate these programs independently.

Remote monitoring programs typically require patient devices, data integration systems, analytics capabilities, and clinical teams that review patient information and intervene when necessary. According to Adamec, these services can help identify health issues before they require hospitalization. He said, “What we see in these programs is a dramatic reduction in unnecessary hospitalizations because it’s an early warning system.”

Adamec also warned that the proposed requirements could be particularly challenging for smaller and rural healthcare providers. He said many organizations would be forced to either discontinue their programs or attempt to build equivalent capabilities internally before the proposed implementation date. He also argued that many vendors work closely with ordering providers and function as part of coordinated care teams rather than operating independently from clinicians.

Cadence, a company that provides remote patient monitoring services to more than 20 health systems and over 100,000 active patients, said it supports efforts to eliminate fraudulent or low-quality programs. However, the company argued that the proposal does not distinguish between lower-quality providers and clinically integrated monitoring programs.

Cadence said a direct-employment requirement could make it more difficult for health systems to deliver RPM services at scale and could further limit access for smaller providers. The company also said restricting access to clinically integrated RPM services could result in more untreated chronic disease and higher downstream Medicare costs.

CMS is seeking public feedback on the proposal, including information on how frequently third-party billing arrangements are used and how the policy could affect access to remote monitoring services. The draft rule also proposes requiring an established patient relationship for RTM services and a separately billable initiating visit before providers can bill Medicare for RPM or RTM services. CMS said these requirements are intended to ensure practitioners have sufficient clinical knowledge and an established relationship before ordering and managing remote therapeutic monitoring services.

The Centers for Medicare & Medicaid Services (CMS) has proposed changes that could significantly impact Medicare remote patient monitoring reimbursement. Under the proposal, Medicare billing for remote monitoring services would be limited to clinical staff directly employed by the billing practice. The proposed policy aims to improve oversight, strengthen accountability, and ensure that remote monitoring services are delivered consistently under appropriate clinical supervision.

Why the Medicare Proposal Matters

The proposed Medicare rule could reshape how healthcare providers manage remote patient monitoring programs. Many organizations currently rely on third-party vendors or outsourced clinical teams to support remote monitoring services. Restricting Medicare billing to practice-employed staff may require providers to modify staffing models and operational workflows.