The Centers for Medicare and Medicaid Services has proposed sweeping new restrictions on how remote monitoring services can be billed under Medicare, targeting outsourced clinical staff arrangements.
Published on July 16, the CY 2027 Medicare Physician Fee Schedule proposed rule would significantly limit Medicare payment for remote physiologic monitoring and remote therapeutic monitoring services performed by contractor personnel.
CMS cited program integrity concerns, recent oversight findings from the Department of Health and Human Services Office of Inspector General, and an effort to curb fraud, waste, and abuse as the primary drivers behind the proposal.
If finalised, the rule would take effect on January 1, 2027, giving providers and vendors a narrow window to restructure their operations before compliance becomes mandatory.
The proposal introduces three key guardrails, including an established-patient requirement for remote therapeutic monitoring, a mandatory initiating visit at the onset of monitoring, and an employed-staff requirement for clinical monitoring functions tied to Medicare billing.
Under the employed-staff requirement, Medicare payment would only be permitted when clinical monitoring is performed by a direct employee of the billing practitioner or their practice, and all existing incident-to requirements are satisfied.
Importantly, CMS has not proposed an outright ban on remote monitoring technology vendors, and the restriction does not prohibit vendors from supplying devices, software, dashboards, connectivity, analytics, or other nonclinical infrastructure to practices.
CMS is also proposing to reduce the valuation of remote monitoring services on the basis that monitoring devices may be available at a reduced cost compared to the agency’s initial estimates.
The HHS Office of Inspector General found in its September 2024 report that Medicare remote physiologic monitoring utilisation increased dramatically from 2019 to 2022, and that 43% of enrollees receiving the service did not receive all required components.
A subsequent HHS-OIG report determined that 2024 Medicare payments for remote physiologic monitoring exceeded $500 million, highlighting the scale of the programme and the financial stakes involved in the proposed restrictions.
The OIG also raised concerns about unscrupulous companies enrolling beneficiaries in remote monitoring regardless of medical necessity through cold calls and advertising, pointing to systemic abuse within the sector.
Physician practices and other Medicare Part B billing practitioners that rely on vendor personnel for monitoring, patient communications, treatment-management functions, or documentation of time would be directly affected if the proposal is finalised.
Outsourced monitoring vendors whose staff perform patient-facing or clinical monitoring functions on behalf of billing practices are also directly in scope, while technology-only vendors face lower but not negligible exposure.
Providers are advised to map current remote monitoring workflows, review vendor service agreements, and evaluate whether employment or technology-only models may be required to maintain Medicare billing eligibility.
The public comment period for the proposed rule closes at 11:59 p.m. ET on September 14, 2026, after which CMS will review submissions before issuing a final rule.