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Health systems, physician groups and telehealth trade associations are raising concerns about a CMS proposal that would bar Medicare payment for remote patient monitoring services delivered by third-party vendors, with early RPM vendor ban reaction pointing to paused RPM plans, unclear reimbursement math and a growing rift with Congress.
Vendors Dominate Today’s RPM Market
Vendors handle the bulk of the RPM market today, according to the American Telemedicine Association. An ATA spokesperson cited industry surveys and market analyses estimating that 60% to 70% of hospitals and health systems using RPM rely on partially or fully outsourced vendor models, with only 30% to 40% running fully in-house programs. The spokesperson said large health systems currently outsourcing that labor would likely struggle to shift to an in-house employee model by Jan. 1, as would organizations with no prior experience hiring and managing clinical staff for RPM.
A Hospital Already Pausing RPM Plans
At least one health system has already paused RPM plans as part of the broader RPM vendor ban reaction. James Wellman, vice president and CIO of Nathan Littauer Hospital & Nursing Home in Gloversville, New York, said the hospital had been evaluating RPM for its nursing home residents, but the proposal “effectively put that on hold.” Wellman said he sees the rule as “a punitive action against the whole due to the problems of a few.”
A Rural CIO Sees No Path to In-House Monitoring
One rural CIO says his system has no path to in-house monitoring on this timeline. Darrell Bodnar, CIO of Whitefield, New Hampshire-based North Country Healthcare, said his organization relies on a third-party vendor for its chronic care management program because it lacks the internal resources to run it in-house, and is still uncertain what an in-house shift would cost in platform and staffing needs.
A Call for Tighter Guardrails, Not a Blanket Ban
Bodnar said he supports CMS’s goal of addressing fraud and inadequate oversight, but called a blanket vendor ban too heavy-handed, saying it “treats clinically integrated partners working under health-system oversight the same as organizations that may be enrolling patients primarily to generate reimbursement.” He said a better approach would tighten accountability, documentation and auditing requirements “without eliminating responsible and well-integrated vendor partnerships.”
Why Smaller Practices Could Be Hit Hardest
Smaller practices could be hit hardest by the proposed change. A Medical Group Management Association spokesperson said many smaller practices rely on outside vendors for remote monitoring because they lack the resources to bring those functions in-house, and said it is unclear whether CMS’s proposed reduction to practice expense values for RPM and remote therapeutic monitoring codes would even cover the cost of providing the services going forward.
The American Hospital Association Is Still Weighing In
The American Hospital Association is still forming its position. A spokesperson told Becker’s the organization intends to submit a comment letter on the proposed rule, but did not offer specifics on its stance on the third-party RPM provision, leaving one of the industry’s largest voices notably undecided so far.
Trade Groups Call the Proposal an Overcorrection
The Alliance for Connected Care said CMS is overcorrecting in its response to fraud concerns. Executive Director Chris Adamec said the proposal would be “devastating” for the hundreds of thousands of older adults, often in rural areas, who rely on RPM vendors to manage chronic conditions. Adamec said his group supports tighter guardrails on which patients receive RPM, but noted that neither the HHS Office of Inspector General nor other watchdogs called for eliminating third-party vendors altogether.
“Cutting Off the Arm to Fix a Broken Nail”
“This is cutting off the arm to fix a broken nail,” Adamec said, adding he expects “thousands of letters” to CMS opposing the provision, a level of anticipated pushback that reflects just how significant this RPM vendor ban reaction has become across the industry.
A Collision With Bipartisan Congressional Action
The proposal collides with a bipartisan telehealth push in Congress. Two days after CMS released the rule, the House Ways and Means Committee approved legislation to expand and protect rural RPM access, creating a direct policy tension between the executive branch’s restrictive proposal and legislative momentum in the opposite direction.
ATA’s CEO Predicts CMS Will Soften the Rule
ATA CEO Kyle Zebley called the provision “downright existential” for third-party RPM vendors and predicted CMS will likely soften it in the final rule. He told Becker’s the proposal is “about as regressive as you can get” after years of steady, bipartisan expansion of RPM policy, and said the volume of anticipated public comments makes him “hopeful” CMS will adjust course before finalizing the rule.
What This RPM Vendor Ban Reaction Means Going Forward
With rural hospitals pausing programs, trade groups predicting massive comment volume, and Congress simultaneously advancing RPM expansion legislation, this RPM vendor ban reaction suggests CMS may face significant pressure to revise its approach before finalizing the rule. Given ATA’s prediction that CMS will likely soften the provision, health systems and vendors alike may want to continue planning under the current proposed framework while closely watching how the final rule addresses the specific concerns raised around cost, timeline, and the distinction between well-integrated and fraudulent vendor arrangements.
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