CMS Proposes Ending Medicare Pay for Outsourced Remote Patient Monitoring

Remote patient monitoring, the Medicare benefit that lets a practice bill for tracking a patient's blood pressure, glucose or other readings between visits, is one of the fastest growing corners of virtual care. A proposed CMS rule released this month would rewrite who is allowed to actually deliver that monitoring, and the answer, if the rule is finalized as written, is no longer an outside vendor.

What CMS actually proposed

On July 16, 2026, the Centers for Medicare and Medicaid Services published its proposed CY2027 Medicare Physician Fee Schedule rule in the Federal Register, covering payment policy for the 2027 calendar year. Among dozens of provisions, CMS proposes to pay for remote physiologic monitoring (RPM) and remote therapeutic monitoring (RTM) services only when they are performed by clinical staff directly employed by the billing practice, not by outsourced contractors or third party remote monitoring companies. Under the current rules, practices have commonly contracted with outside vendors to handle device setup, data collection and patient check ins for RPM and RTM programs.

The proposed rule also would limit RTM billing to patients who already have an established relationship with the billing practitioner, and would require a separately reportable initiating visit connected to the start of monitoring services for both RPM and RTM. CMS's own fact sheet on the rule notes the agency is weighing whether to bundle the existing RPM and RTM CPT codes into four new HCPCS G codes, two for initial setup and two for ongoing monthly monitoring or management, and is revisiting the valuation of these services, citing device costs that may be lower than CMS originally estimated.

Why CMS says this is needed

Medicare has covered remote physiologic monitoring since 2018, and according to STAT News reporting on the proposal, payments for RPM services topped 500 million dollars in 2024. That growth has drawn scrutiny. STAT reports the proposal follows concerns raised by the HHS Office of Inspector General, along with academics and insurers, that the current structure pays for what OIG has characterized as low value monitoring, including arrangements where an outside vendor, rather than the treating practice, does most of the actual monitoring work while billing runs through the physician.

CMS frames the outsourcing restriction, the established patient requirement for RTM, and the initiating visit requirement as guardrails meant to tie monitoring billing more directly to a genuine, ongoing clinical relationship rather than a vendor relationship layered on top of a Medicare number.

How the telehealth industry is responding

ATA Action, the advocacy arm of the American Telemedicine Association, reviewed the proposed rule and issued initial comments on July 15, 2026, the day the rule became public. ATA CEO and ATA Action executive director Kyle Zebley said the organization was eager to work with CMS and the administration on the draft rule, while flagging provisions that would warrant closer examination. In the days that followed, ATA Action sharpened its public position, warning that the outsourcing ban and related changes would scale back remote monitoring services and cut reimbursement for practices that rely on third party monitoring partners to run these programs at scale.

The trade press, including Fingerlakes1.com, reported on July 22, 2026 that ATA Action is contrasting the CMS proposal with action in Congress. Two days after the rule dropped, on July 15, 2026, the House Ways and Means Committee advanced H.R. 3108, the Rural Patient Monitoring Access Act, out of committee on a 39 to 0 vote, according to the committee's own announcement. That bill would set a reimbursement floor for RPM services and remove payment reductions that currently apply to monitoring delivered in some rural areas. The bill has cleared committee only; it has not passed the House, the Senate, or been signed into law.

What this means for patients and practices

Nothing changes for patients or practices today. This is a proposed rule, not a final one, and CMS is required to review public comments before it can finalize any of these provisions. If adopted as proposed, the outsourcing restriction would take effect January 1, 2027, and would primarily affect the business model behind RPM and RTM programs rather than a patient's day to day monitoring experience, since practices could still offer the same services using their own staff.

Practices that currently contract with outside remote monitoring vendors would need to either bring that staffing in house or restructure those contracts before the rule takes effect, assuming it survives the comment process unchanged. Patients already enrolled in a remote monitoring program through their doctor's office should not expect any near term disruption; the proposal targets how the service is staffed and billed, not whether Medicare covers it.

What happens next

The public comment period on the CY2027 Physician Fee Schedule proposed rule runs through 11:59 p.m. Eastern on September 14, 2026. CMS will review comments, which can come from patients, clinicians, hospitals, monitoring vendors and advocacy groups like ATA Action, before issuing a final rule later in 2026, typically in the fall, ahead of the new calendar year. Provisions can and do change between the proposed and final versions of the annual fee schedule.

Limits of what is known

This is general information about a pending federal rulemaking, not medical or legal advice. The rule remains a proposal, and its outsourcing restriction, established patient requirement and code consolidation could each be narrowed, dropped or changed before a final rule is issued. Practices and patients with specific billing or coverage questions should consult CMS's published materials directly or a qualified health care attorney or compliance professional.