CMS wants to cut off Medicare payment for the third-party vendors that run most remote patient monitoring programs today. The provision, tucked into the proposed 2027 physician fee schedule, has drawn swift pushback from hospitals, physician groups and the vendors themselves, and it’s colliding with a bipartisan push in Congress to expand remote monitoring access.
Here are 13 things to know:
1. CMS proposed the rule July 14. If finalized, Medicare would pay for remote physiologic monitoring and remote therapeutic monitoring only when the clinical staff furnishing the service are employed directly by the billing practice, not a contracted third-party company. Staff would not need to work on-site, but the billing relationship would have to run through the practice itself.
2. The proposal applies only to outpatient monitoring — the codes at issue cover patients managing conditions at home or in a nursing facility between visits, billed under the Medicare Physician Fee Schedule. Monitoring during an inpatient stay is paid separately, bundled into the hospital’s DRG payment, and isn’t affected by this rule. The same logic extends to Acute Hospital Care at Home: those stays are billed at the standard inpatient DRG rate, so a hospital’s at-home monitoring vendor arrangements for that program aren’t affected by this rule either.
3. CMS argues outsourcing to a third party can fragment care and weaken a billing practitioner’s oversight. The agency has also framed the change as a program-integrity measure, citing fraud and low-quality billing among the concerns behind the proposal. CMS wrote in the proposed rule that outsourcing RPM and RTM services to a third party “can fragment care, lead to insufficient involvement and oversight of the billing practitioner.”
4. The proposal leans heavily on two HHS Office of Inspector General findings. A 2024 report found 43% of Medicare enrollees who received remote patient monitoring in 2022 missed at least one required service component. A 2025 follow-up found Medicare payments for the services jumped 31% — from $408 million in 2023 to $536 million in 2024 — with nearly 1 million enrollees receiving them last year, up 27% from 2023.
5. The vendor restriction isn’t the only change. The proposal would also limit remote therapeutic monitoring to established patients, require a separately reportable initiating visit before monitoring begins, cut practice expense valuations for several remote monitoring codes, and seek comment on consolidating the codes into four new G-codes.
6. Third-party vendors run the bulk of remote patient monitoring programs today. The American Telemedicine Association estimates 60% to 70% of hospitals and health systems using remote monitoring rely on partially or fully outsourced vendor models, with only 30% to 40% operating fully in-house.
7. Trade groups say CMS is overcorrecting. Christopher Adamec, executive director of the Alliance for Connected Care, said his group supports tighter guardrails on which patients receive remote monitoring, but noted that neither the OIG nor other federal watchdogs called for eliminating third-party vendors outright. “This is cutting off the arm to fix a broken nail,” Mr. Adamec told Becker’s.
8. Vendors and providers have organized against the proposal. A coalition called Save Remote Monitoring, launched in July by monitoring company ChartSpan, is asking CMS to withdraw the third-party provision and instead pursue enforcement against confirmed bad actors. “Claw back payment for devices that never transmit meaningful data,” the coalition said in a statement announcing its launch, arguing the rule targets a compliant care model rather than the fraud the OIG identified. Separately, research authored by remote monitoring vendor Cadence tied its programs to a 27% reduction in hospital admissions and a $1,302 per-patient annual reduction in the total cost of care, and a 70% relative increase in the share of hypertension patients reaching their blood pressure goal, from 21.5% to 36.6%.
9. Some hospitals have already begun rethinking their plans. James Wellman, vice president and CIO of Nathan Littauer Hospital & Nursing Home in Gloversville, N.Y., said the hospital had been evaluating remote monitoring for its nursing home residents, but the proposal put those plans on hold, according to Becker’s. Mr. Wellman said he views the rule as a punitive action against the whole industry over the problems of a few bad actors.
10. Smaller practices and rural providers could be hit hardest. A Medical Group Management Association spokesperson said many smaller practices rely on outside vendors because they lack the resources to bring remote monitoring in-house, and questioned whether CMS’ proposed cuts to practice expense valuations would even cover the cost of providing the services going forward. The American Hospital Association said it plans to submit a comment letter but has not detailed its position on the third-party provision.
11. The proposal cuts against a bipartisan push in Congress. Two days after CMS released the rule, the House Ways and Means Committee advanced legislation to expand and protect rural remote monitoring access, including a bill that would set a national reimbursement floor for the services. ATA Action, the American Telemedicine Association’s advocacy arm, said it is coordinating with members on a detailed response to CMS, flagging the remote monitoring restrictions among the provisions it believes could carry unintended consequences.
12. The proposal also lands awkwardly next to the $50 billion Rural Health Transformation Program, where multiple states have written remote monitoring directly into their funding plans — South Carolina, for instance, is using its award to purchase RPM equipment for rural patients with diabetes, hypertension, COPD and heart disease. Much of that funding assumes rural providers can lean on outside vendors to stand up programs quickly; if the third-party restriction survives to next year, some of that infrastructure could outlast the billing model it was built to support.
13. CMS is accepting public comments on the proposed rule through Sept. 14, with most provisions set to take effect Jan. 1, 2027, if finalized. ATA CEO Kyle Zebley has predicted the agency will soften the third-party provision in the final rule, citing the volume of opposition comments he expects the proposal to draw.
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