CMS plans to eliminate payment for RPM services by third-party vendors
The 2027 PFS includes a proposal that, if finalized, would prevent healthcare organizations from billing for RPM services provided by third-party companies, significantly altering the RPM landscape.
Following federal watchdog reports on fraud in the remote patient monitoring sector, CMS is proposing to end payment for RPM services provided by third-party vendors. This change, if finalized, would upend the RPM arena, as many healthcare organizations provide RPM services through vendor-run platforms and teams.
Released on July 14, CMS' proposed rule for the 2027 Medicare Physician Fee Schedule includes sweeping changes to physician payment and value-based care programs. In addition, the agency included various changes to RPM and remote therapeutic monitoring service payments.
The agency proposed that RTM services be provided only to established patients and that practitioners reporting RPM or RTM services provide a separately reportable initiating visit in association with the start of the services.
Further, CMS is proposing updates to the valuation of RPM services under the PFS, noting that the existing valuation of certain CPT codes "may not accurately reflect the resource costs involved in these services." The agency is also considering, and seeking comments on, bundling the RPM and RTM CPT codes and creating four new HCPCS G-Codes to describe RPM services.
CMS cites fraud concerns in proposal to ban third-party RPM services
In a major policy shift, the proposed rule includes a ban on vendor-driven RPM services, stating that it would "only allow payment for RPM or RTM services when furnished by clinical staff employed by the practice."
While this does not mean that the clinical staff must be physically located within the practice or that the beneficiary needs to be on-site, it does mean that healthcare organizations would not be allowed to bill for RPM or RTM services performed by contracted third-party companies.
[RPM is] the poster child of using technology to deliver care more efficiently and deliver cost savings, which, to my understanding, is kind of the North Star for the current administration. So, it's a little baffling that a couple of little program integrity concerns would blow up the whole program rather than just lead to some additional guardrails.
Christopher AdamecExecutive director, Alliance for Connected Care
CMS cited reports from HHS' Office of Inspector General that indicate potential for fraud and the need for increased oversight of RPM billing practices.
One report released in 2024 found that 43% of Medicare enrollees who received RPM in 2022 did not receive at least one of three RPM components: education and setup, device supply and treatment management.
Further, the report highlighted that some companies make unsolicited contact with Medicare enrollees, either signing them up for RPM that never occurs or providing devices without sufficient staff to conduct monitoring, among other fraud risks. CMS directly cited the "cold calling" issue as one of the reasons for the new proposal.
Another HHS-OIG report released in 2025 revealed that Medicare payments increased 31% from $408 million in 2023 to $536 million in 2024. The report detailed some instances of fraud, albeit involving a small proportion of practices. For example, 45 medical practices did not have the mandated prior medical relationship with more than 80% of patients for whom they billed RPM in 2024, and 34 practices frequently billed Medicare for the same enrollees as two or more other practices. "
"After reviewing the findings discussed in recent OIG reports…We believe outsourcing RPM/RTM services to a third party can fragment care, lead to insufficient involvement and oversight of the billing practitioner, or result in services that do not actually represent or facilitate all required aspects of RPM or RTM services," the proposed rule states. "Provision of these services by entities having only a loose association with the treating practitioner can detract from longitudinal, patient-centered care."
Industry apprehensive about proposal
Industry groups are puzzled about CMS' proposal to prohibit billing for RPM services by third-party vendors.
Christopher Adamec, executive director of the Alliance for Connected Care, noted that the industry has recognized the need for guardrails to prevent "low-value" RPM services. He highlighted efforts by the Remote Monitoring Leadership Council to work with HHS-OIG on creating these safeguards.
This industry recognition, combined with other efforts to enhance access to technology-enabled care, makes the proposal all the more perplexing.
"[RPM is] the poster child of using technology to deliver care more efficiently and deliver cost savings, which, to my understanding, is kind of the North Star for the current administration," Adamec said. "So, it's a little baffling that a couple of little program integrity concerns would blow up the whole program rather than just lead to some additional guardrails."
"What CMS has done in this rulemaking is just like cutting off the entire arm, because this ends RPM, both high quality and low quality," he continued. "It doesn't recognize that these programs are driving a huge amount of savings, including in accountable care organizations and other places where there's value-based care because they do have a meaningful impact on rehospitalizations and costs."
Further, Adamec stated that, if finalized, this proposal would make it harder for providers to implement RPM programs, particularly among smaller, lower-resourced and rural organizations.
"Most providers that have gone with a vendor went with a vendor because they couldn't do it themselves," he said. "They were going to lose money doing it themselves, and logistically it was too difficult. So, I think that this [proposal] is going to mean that hundreds of thousands of Medicare beneficiaries, at a minimum, will lose access to services that they're relying on to keep them out of the hospital."
The agency is seeking comment on this proposal, specifically on how often third-party billing currently occurs and how this policy could impact RPM access.
Anuja Vaidya has covered the healthcare industry since 2012. She currently covers healthcare IT and innovation, including artificial intelligence, digital healthcare, EHRs and interoperability.
