Perhaps the most consequential part in the proposed rule is CMS's plan to prohibit the outsourcing of RPM and RTM services to third-party companies.
On July 16, 2026, the Centers for Medicare and Medicaid Services (CMS) published the calendar year 2027 Medicare Physician Fee Schedule proposed rule, which includes a sweeping set of proposed changes to remote physiologic monitoring (RPM) and remote therapeutic monitoring (RTM) services. The proposed rule responds directly to two reports issued by the Office of Inspector General (OIG) in 2024: “Additional Oversight of Remote Patient Monitoring in Medicare Is Needed” and “Billing for Remote Patient Monitoring in Medicare.” In these reports, OIG raised program integrity concerns and called for additional Medicare program oversight of remote patient monitoring.
The proposals signal CMS's intent to draw a harder line around the billing and delivery of remote monitoring services. If finalized, the proposed changes would take effect on January 1, 2027.
Third-Party Outsourcing of RPM and RTM Services
Perhaps the most consequential part in the proposed rule is CMS's plan to prohibit the outsourcing of RPM and RTM services to third-party companies. Under the proposal, RPM and RTM services would be payable only when furnished by clinical staff who are direct employees of the billing provider or the provider’s practice. If finalized, beginning January 1, 2027, the RPM and RTM codes cannot be billed in cases where the service is performed by contracted third-party staff.
CMS stated in the proposed rule that it "believes 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 agency further noted that it does "not believe that RPM or RTM services provided by clinical staff contracted by a third party can ensure the billing practitioner has adequate oversight, management, or collaboration" to appropriately bill for these services.
Notably, CMS clarified that the proposal does not require clinical staff to be physically located within the practice, nor does it require the beneficiary to be on-site to receive remote monitoring services. Rather, the clinical staff must be under the general supervision of the billing provider, all requirements of the "incident to" regulations at 42 C.F.R. § 410.26 must be met, and the staff must be a direct employee.
CMS is seeking comments on this proposal, including how often third-party billing currently occurs and how the policy could impact access to remote monitoring services.
New Initiating Visit Requirement
CMS is also proposing that providers reporting RPM or RTM services must furnish a separately reportable initiating visit in association with the onset of those services. This visit must be face-to-face (either in-person or via telehealth) and must be furnished by the billing provider. The initiating visit is intended to ensure that the billing practitioner assesses the beneficiary to determine the clinical appropriateness of RPM/RTM and obtains beneficiary consent. If RPM or RTM is not actually discussed with the patient at the visit, that visit cannot count as the initiating visit. Current procedural terminology codes that do not involve a face-to-face encounter by the billing practitioner, or that are not separately payable under Medicare, cannot serve as the initiating visit. The visit may be separately billed.
Extension of the Established Patient Requirement to RTM
Under current policy, RPM services require an established patient relationship. CMS proposes to extend this requirement to RTM services. CMS explained that doing so would both address OIG’s concerns that some providers lacked prior relationships with patients for whom they billed remote monitoring services and enable the treating provider to meaningfully assess the patient’s need for RTM services.
Key Takeaways
These proposals represent a significant shift in how CMS intends to regulate remote monitoring services. Providers and companies that currently rely on third-party vendors to deliver RPM or RTM services should begin evaluating the potential impact on operations.
The comment period is open through September 14, 2026.
For More Information
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