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The Trump administration proposed major changes to Medicare payment policies that will block third-party vendors from remote patient monitoring, an RPM third-party vendor ban that health tech leaders say will significantly disrupt services that help patients manage conditions like diabetes and hypertension.
How the RPM Third-Party Vendor Ban Would Work
The policy change, tucked inside a hefty Medicare physician pay draft rule released this week, marks a shift with far-reaching implications for RPM companies, primary care physicians, hospitals and health systems by eliminating third-party vendors. Medicare is aiming to tighten the rules around remote physiologic monitoring and remote therapeutic monitoring. Under the draft rule, Medicare will only allow payment for RPM or RTM services when furnished by clinical staff employed by the practice, effective January 1, 2027.
What Gets Blocked Under the Proposal
If finalized, for the purposes of billing Medicare, the RPM and RTM codes could not be billed in cases where the service is not performed by clinical staff of the billing practitioner, and the rule will not allow contracting out to third-party companies, regulators wrote in the draft rule.
Why CMS Is Pursuing the RPM Third-Party Vendor Ban
The change was driven by CMS’s concerns about program integrity and vendors offering low-quality care. The proposed rule cites a September 2024 HHS Office of Inspector General report that called for more oversight to ensure that remote patient monitoring is being used and billed appropriately. OIG found that the use of remote patient monitoring in Medicare increased dramatically from 2019 to 2022, but about 43% of enrollees who received these services did not receive all three components of it.
Rapid Spending Growth Behind the Proposal
Payments for remote patient monitoring jumped 31% from $408 million in 2023 to $536 million in 2024, according to a 2025 report. In 2024, nearly 1 million enrollees received these services, up 27% from 2023. “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,” regulators wrote in the proposed rule, adding that provision of these services by entities “having only a loose association with the treating practitioner can detract from longitudinal, patient-centered care.”
Industry Pushback Against the RPM Third-Party Vendor Ban
Many primary care providers, hospitals and health systems work with third-party RPM vendors because they do not have the resources or infrastructure to provide these services in-house, said Christopher Adamec, executive director of the industry group Alliance for Connected Care. “What we see in these programs is a dramatic reduction in unnecessary hospitalizations because it’s an early warning system,” Adamec said. If the policy changes are enacted, “many Medicare beneficiaries will lose access to services that are keeping them out of the hospital right now,” he asserted.
A Timeline Many Providers Can’t Meet
Many providers cannot build their own RPM programs in six months given the January 1, 2027 deadline for the policy changes to go into effect, Adamec noted. “Prohibiting vendors is going to mean that healthcare providers are given the choice of either ending these programs or building all that capability in-house. I think that we’re going to see the majority choose to end the capabilities versus trying to build it in-house,” he said, adding that vendors “exist for a reason” because these capabilities are too difficult for most providers to build on their own.
A Leading RPM Vendor Responds to the Ban
Cadence, a leading provider of remote patient monitoring that works with more than 20 health systems and treats more than 100,000 active patients, said in a statement that it shares CMS’s goal of eliminating low-quality, disconnected and fraudulent remote patient monitoring programs. “The proposed rule does not distinguish between low-quality RPM and clinically integrated programs like ours that are helping health systems manage chronic disease, reduce avoidable hospitalizations and emergency visits, and expand access to care,” company executives said.
Evidence Supporting Vendor-Run Programs
“A blanket direct-employment requirement would make it harder for even the country’s largest health systems to deliver RPM at scale. If they cannot do it, smaller and rural providers certainly cannot,” Cadence executives noted. One Mayo Clinic study found that Cadence’s model drove a 27% reduction in hospital admissions and a $1,302 per-patient annual reduction in total cost of care. A study published in the Journal of the American College of Cardiology found that Cadence’s remote patient care hypertension program led to a 70% improvement in blood pressure control for hypertension patients.
What Industry Groups Are Recommending Instead of the RPM Third-Party Vendor Ban
CMS said it wants public comment on the proposal, specifically on how often third-party billing currently occurs and how this policy, if finalized, could impact access to remote monitoring services. Cadence advises CMS to require ACO participation to align incentives, require 24/7 clinical support to ensure rapid response and avoidance of unnecessary hospitalizations, and require documentation regarding clinical integration and evidence-based protocols.
The Remote Monitoring Leadership Council’s Recommendations
In letters to CMS prior to the 2027 PFS draft rule, the Remote Monitoring Leadership Council urged 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, and promoting consistent RPM coverage across traditional Medicare and Medicare Advantage. “There is a recognition among the community that there are some lower-quality RPM providers out there. The solution, though, isn’t to eliminate the services. The solution is to add some additional guardrails that address the practices that CMS is concerned about,” Adamec said.
A Sharp Contrast to Recent Expansion Efforts
The RPM policy changes are a sharp contrast to recent moves by regulators and Congress to expand access to tech-enabled care. CMS expanded RPM billing last year. The $50 billion Rural Health Transformation Program, enacted by Congress last year, supports health tech innovation, including scaling remote patient monitoring services. This week, the House Ways and Means Committee advanced a legislative healthcare package that included the Rural Patient Monitoring Access Act, which establishes a national floor for RPM reimbursement.
Additional Restrictions Beyond the RPM Third-Party Vendor Ban
Under the Trump administration, CMS has made a big push into tech-enabled, outcomes-driven care models, including the ACCESS and MAHA ELEVATE models as well as the Health Tech Ecosystem initiative. The draft rule also included other changes related to RPM programs, including that RTM services can only be furnished to established patients, a requirement CMS said would help ensure practitioners have sufficient clinical knowledge to appropriately order and manage RTM services. CMS also would require providers to see patients in a separately reportable initiating visit before billing for RPM or RTM services.
What This Means Going Forward
With the January 1, 2027 effective date fast approaching and industry groups warning that most providers can’t realistically build in-house RPM capabilities in time, the RPM third-party vendor ban could reshape access to remote monitoring for millions of Medicare beneficiaries managing chronic conditions. Given the sharp policy contrast between this restrictive proposal and Congress’s simultaneous push to expand rural RPM access through the Rural Patient Monitoring Access Act, the public comment period is likely to draw significant engagement from vendors, health systems, and patient advocacy groups before CMS finalizes its approach.
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