CMS Proposes Limits on Outsourced Remote Monitoring Under Medicare
CMS proposes Medicare payment limits for remote monitoring done by contractors.
Why it matters: In-house counsel and healthcare legal advisors must review contracts and compliance plans due to restrictions on outsourced remote monitoring services under Medicare, starting 2027.
- CMS proposed new Medicare payment rules on July 16, 2026, affecting remote physiologic monitoring (RPM) and remote therapeutic monitoring (RTM).
- Payment would be allowed only for monitoring performed by clinical staff employed by the billing practitioner or practice.
- RPM and RTM services must be furnished to established patients with a separately reportable initiating visit.
- CMS estimates the rule could save $82 million annually and aims to reduce fraud and abuse.
- The rule, if finalized, takes effect January 1, 2027.
On July 16, 2026, the Centers for Medicare & Medicaid Services (CMS) proposed the Calendar Year 2027 Medicare Physician Fee Schedule rule, introducing substantial restrictions on payments for remote physiologic monitoring (RPM) and remote therapeutic monitoring (RTM) services. The rule targets services performed by contractor personnel rather than clinical staff directly employed by the billing practitioner.
CMS's proposal requires that RPM and RTM services must be provided only to established patients and mandates a separately reportable initiating visit at the start of monitoring services. Medicare payment would be authorized solely when clinical staff who are employees of the practitioner or practice perform the monitoring. This change specifically addresses Medicare payments and does not ban technology vendors from supplying devices, software, dashboards, or analytics to practices.
According to CMS Administrator Dr. Mehmet Oz, these steps are designed to strengthen tools protecting Medicare beneficiaries and taxpayer funds from fraud, waste, and abuse. The Department of Health and Human Services' Office of Inspector General found concerns regarding contractor personnel's role in remote monitoring, prompting these regulatory changes.
The proposed restrictions are scheduled to take effect on January 1, 2027, if finalized. CMS estimates the rule could generate approximately $82 million in annual savings by limiting payments to monitoring performed by in-house clinical staff only.
By the numbers:
- $82 million annually — estimated savings from CMS proposed restrictions
- July 16, 2026 — date the proposed CY 2027 Medicare Physician Fee Schedule rule was published
- January 1, 2027 — scheduled effective date for the proposed rule if finalized