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CMS wants to cut off Medicare payment for the third-party vendors that run most remote patient monitoring programs today. The provision, tucked into the proposed 2027 physician fee schedule, has drawn swift pushback from hospitals, physician groups and the vendors themselves, and it’s colliding with a bipartisan push in Congress to expand monitoring access. Here’s how the CMS remote patient monitoring ban would work and why it’s proving so contentious.
What the CMS Remote Patient Monitoring Ban Would Actually Require
CMS proposed the rule July 14. If finalized, Medicare would pay for physiologic monitoring and remote therapeutic monitoring only when the clinical staff furnishing the service are employed directly by the billing practice, not a contracted third-party company. Staff would not need to work on-site, but the billing relationship would have to run through the practice itself. The proposal applies only to outpatient monitoring, the codes at issue cover patients managing conditions at home or in a nursing facility between visits, billed under the Medicare Physician Fee Schedule. Monitoring during an inpatient stay is paid separately, bundled into the hospital’s DRG payment, and isn’t affected by this rule.
CMS’s Rationale Behind the Proposal
CMS argues outsourcing to a third party can fragment care and weaken a billing practitioner’s oversight. The agency has also framed the change as a program-integrity measure, citing fraud and low-quality billing among the concerns behind the proposal. CMS wrote in the proposed rule that outsourcing these services to a third party “can fragment care, lead to insufficient involvement and oversight of the billing practitioner.”
The Evidence Behind the CMS Remote Patient Monitoring Ban
The proposal leans heavily on two HHS Office of Inspector General findings. A 2024 report found 43% of Medicare enrollees who received this monitoring in 2022 missed at least one required service component. A 2025 follow-up found Medicare payments for these services jumped 31%, from $408 million in 2023 to $536 million in 2024, with nearly 1 million enrollees receiving them last year, up 27% from 2023.
Additional Changes Beyond the Vendor Restriction
The vendor restriction isn’t the only change. The proposal would also limit remote therapeutic monitoring to established patients, require a separately billable initiating visit before monitoring begins, cut practice expense valuations for several monitoring codes, and seek comment on consolidating the codes into four new G-codes.
How Reliant the Industry Is on Third-Party Vendors Facing This CMS Remote Patient Monitoring Ban
Third-party vendors run the bulk of this monitoring today. The American Telemedicine Association estimates 60% to 70% of hospitals and health systems using at-home monitoring rely on partially or fully outsourced vendor models, with only 30% to 40% operating fully in-house.
Trade Groups Say CMS Is Overcorrecting
Trade groups say CMS is overcorrecting. Christopher Adamec, executive director of the Alliance for Connected Care, said his group supports tighter guardrails on which patients receive this monitoring, but noted that neither the OIG nor other federal watchdogs called for eliminating third-party vendors outright. “This is cutting off the arm to fix a broken nail,” Adamec told Becker’s.
Organized Opposition to the CMS Remote Patient Monitoring Ban
Vendors and providers have organized against the proposal. A coalition called Save Remote Monitoring, launched in July by monitoring company ChartSpan, is asking CMS to withdraw the third-party provision and instead pursue enforcement against confirmed bad actors. “Claw back payment for devices that never transmit meaningful data,” the coalition said in a statement announcing its launch, arguing the rule targets a compliant care model rather than the fraud the OIG identified.
Clinical Evidence Supporting Vendor-Run Models
Separately, a Mayo Clinic study tied one vendor-run at-home monitoring model to a 27% reduction in hospital admissions and a $1,302 per-patient annual reduction in the total cost of care, and a Journal of the American College of Cardiology study tied a vendor-run hypertension program to a 70% improvement in blood pressure control.
How Hospitals Are Responding to the CMS Remote Patient Monitoring Ban
Some hospitals have already begun rethinking their plans. James Wellman, vice president and CIO of Nathan Littauer Hospital & Nursing Home in Gloversville, New York, said the hospital had been evaluating this monitoring for its nursing home residents, but the proposal put those plans on hold. Wellman said he views the rule as a punitive action against the whole industry over the problems of a few bad actors.
Smaller Practices Could Be Hit Hardest
Smaller practices and rural providers could be hit hardest. A Medical Group Management Association spokesperson said many smaller practices rely on outside vendors because they lack the resources to bring these services in-house, and questioned whether CMS’s proposed cuts to practice expense valuations would even cover the cost of providing them going forward. The American Hospital Association said it plans to submit a comment letter but has not detailed its position on the third-party provision.
A Bipartisan Congressional Collision With the CMS Remote Patient Monitoring Ban
The proposal cuts against a bipartisan push in Congress. Two days after CMS released the rule, the House Ways and Means Committee advanced legislation to expand and protect rural access to these services, including a bill that would set a national reimbursement floor for the program. ATA Action, the American Telemedicine Association’s advocacy arm, said it is coordinating with members on a detailed response to CMS, flagging these restrictions among the provisions it believes could carry unintended consequences.
Timeline and What Comes Next
CMS is accepting public comments on the proposed rule through Sept. 14, with most provisions set to take effect Jan. 1, 2027, if finalized. ATA CEO Kyle Zebley has predicted the agency will soften the third-party provision in the final rule, citing the volume of opposition comments he expects the proposal to draw.
What This CMS Remote Patient Monitoring Ban Means Going Forward
With comments due Sept. 14 and organized opposition already forming through coalitions like Save Remote Monitoring, the CMS remote patient monitoring ban faces significant pressure to be revised before finalization. Given the sharp contrast between CMS’s restrictive proposal and Congress’s simultaneous push to expand rural access, health systems, vendors, and physician groups will likely continue building their comment strategies around the specific evidence gaps trade groups have identified, particularly the absence of any OIG recommendation to eliminate third-party vendors entirely.
What to Watch Going Forward
As the comment period progresses, industry observers will be watching whether CMS ultimately narrows the vendor restriction to target specific bad-actor practices rather than the broader outsourced model that supports the majority of current programs. Given Zebley’s prediction that the agency will soften this provision, health systems and vendors currently pausing or reconsidering plans may want to continue operating under the current proposed framework while closely tracking how CMS responds to the substantial pushback this CMS remote patient monitoring ban has already generated.
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