The Trump administration has proposed sweeping changes to Medicare payment policies that would prevent third-party vendors from remotely monitoring patients. Health technology leaders say the changes will significantly disrupt services that help patients manage conditions such as diabetes and high blood pressure.
The policy change, included in the draft Medicare physician pay rules announced this week, marks a change that will have far-reaching implications for RPM companies, primary care physicians, hospitals and health systems by eliminating third-party vendors.
The Centers for Medicare and Medicaid Services (CMS) on Tuesday announced changes to Medicare Part B payment policies for physicians under the Physician Fee Schedule Draft Rule for Calendar Year 2027, which outlines sweeping changes to Medicare’s payment and value-based care programs.
An unpublished PDF version of the 1,592-page proposal can be viewed here.
Medicare aims to strengthen regulations regarding remote physiological monitoring (RPM) and remote therapy monitoring (RTM). Under the draft rule, starting January 1, 2027, Medicare would only allow payment for RPM or RTM services if provided by clinical staff employed by a clinic.
If finalized, for purposes of billing Medicare, RPM and RTM codes will not be billable or allowed to be contracted out to a third-party company if the service is not performed by the biller’s clinical staff, the regulators wrote in the draft rule.
This change was prompted by CMS concerns about program integrity and poor quality care provided by vendors. The proposed rule cites a September 2024 HHS Office of Inspector General report that called for more oversight to ensure remote patient monitoring is being used and billed appropriately. According to OIG research, the use of remote patient monitoring in Medicare increased dramatically from 2019 to 2022, but approximately 43% of enrollees who received these services did not receive all three components of the service.
According to the 2025 report, payments for remote patient monitoring increased by 31% from $408 million in 2023 to $536 million in 2024. In 2024, nearly 1 million enrollees received these services, an increase of 27% from 2023.
“We believe that outsourcing RPM/RTM services to third parties can result in fragmented care, insufficient billing personnel involvement and oversight, and services that do not actually represent or facilitate all necessary aspects of RPM and RTM services,” the regulators wrote in the 2027 proposed PFS rule.
“The provision of these services by entities with only a loose relationship with treatment providers may undermine long-term patient-centered care,” the regulators wrote. CMS asserts that RPM and RTM services provided by third-party contracted clinical staff may not provide sufficient physician oversight or clinical integration to justify claims.
Christopher Adamek, executive director of the industry group Alliance for Connected Care, said many primary care providers, hospitals and health systems work with third-party RPM vendors because they don’t have the resources or infrastructure to provide these services in-house.
The proposed requirements would make it difficult for health care providers, especially small rural health care providers with limited resources and budgets, to provide RPM services, health technology leaders said.
Remote monitoring services require the provision of devices to patients, data integration, machine learning and analytics capabilities to analyze the data, and a clinical team to monitor the data and intervene to provide care management services.
“What we’re seeing with these programs is a dramatic reduction in unnecessary hospitalizations because it’s an early warning system,” Adamek said.
If the policy change goes into effect, “many Medicare beneficiaries will lose access to services that currently preclude them from going to the hospital,” Adamek argued.
He noted that given the policy change’s effective date of January 1, 2027, many providers will not be able to build their own RPM programs within six months.
“Vendor bans mean that health care providers will be given the choice of terminating these programs or building their capabilities entirely in-house. The majority will choose to terminate the capabilities rather than trying to build them in-house. There are also health systems that have their own capabilities in-house. Even if they choose to build their own critical capabilities, they will still want to have the option of choosing a vendor,” Adamek said.
He added that these features are too difficult for most providers to build their own programs for, so RPM vendors “exist for a reason.” “Vendors often have capabilities ready to go when you need them, rather than having to spend years developing and building the infrastructure to support something,” he said.
In contrast to CMS’s characteristic that third-party vendors have “loose relationships with providers,” many RPM companies are tightly integrated with ordering providers, Adamek said. “They really are part of the coordinated care team for the patient,” he said.
Cadence is a leading provider of remote patient monitoring, working with more than 20 health systems and treating more than 100,000 active patients. In a statement to Fierce Healthcare, the company said Cadence also shares CMS’ goal of eliminating low-quality, disconnected and fraudulent remote patient monitoring programs.
“The proposed rule does not distinguish between low-quality RPMs and clinically integrated programs like ours that help health systems manage chronic diseases, reduce avoidable hospitalizations and emergency visits, and expand access to care,” company executives said in a statement.
“Comprehensive direct employment requirements will make it difficult for even the nation’s largest health systems to offer RPM at scale. If they can’t do it, smaller and rural providers certainly won’t be able to,” Cadence executives noted.
Limiting access to clinically integrated RPM will increase untreated chronic disease and ultimately increase downstream Medicare costs, Cadence said.
A Mayo Clinic study found that Cadence’s model reduced hospitalizations by 27% and reduced total treatment costs by $1,302 per patient per year. A study published in the Journal of the American College of Cardiology found that Cadence’s telepatient care hypertension program improved blood pressure control in hypertensive patients by 70%.
CMS said it is seeking public comment on the proposal, specifically on how often third-party charges are currently made and how this policy, if finalized, could affect access to remote monitoring services.
Prior to the 2027 draft PFS rule, many companies and industry organizations recommended steps CMS should take to eliminate the use of low-value RPMs. In letters to CMS in 2024 and last year, Cadence recommended that CMS require ACO participation to align incentives, require 24/7 clinical support to ensure prompt response and avoidance of unnecessary hospitalizations, and require documentation of clinical integration, implementation of evidence-based protocols, and ongoing clinical performance.
The Telemonitoring Leadership Council called on CMS to take additional steps to support remote patient monitoring, including issuing more billing guidance and best practices, developing a long-term payment framework for RPM device codes, recognizing the increased complexity of patients with multiple chronic conditions, and promoting consistent RPM coverage across traditional Medicare and Medicare Advantage.
“There is recognition among the community that there are low-quality RPM providers out there. However, the solution is not to eliminate services. The solution is to add additional guardrails that address the practices that CMS is concerned about,” Adamec said.
RPM’s policy changes stand in sharp contrast to recent moves by regulators and Congress to expand access to technology-enabled care. CMS expanded RPM billing last year. The $50 billion Rural Health Transformation Program, enacted by Congress last year, supports health innovations such as expanding remote patient monitoring services. This week, the House Ways and Means Committee advanced a legislative health care package that includes the Rural Patient Oversight Access Act, a bill that would establish national standards for RPM reimbursement.
Under the Trump administration, CMS has made a major push toward technology-enabled, outcomes-based care models, including the ACCESS and MAHA ELEVATE models, as well as the Health Tech Ecosystem initiative.
The draft physician fee schedule regulations included other changes related to the RPM program, including that RTM services could only be provided to established patients. CMS said this requirement will help physicians establish relationships with patients and ensure sufficient clinical knowledge to properly order and manage RTM services.
CMS also requires that a health care provider see a patient in a separately reportable initial visit before billing for RPM or RTM services.
