Medicare proposes significant restrictions on and lower device reimbursement for remote monitoring services

On July 14, 2026, the Centers for Medicare and Medicaid Services (CMS) issued the Calendar Year (CY) 2027 Medicare Physician Fee Schedule (PFS) Proposed Rule (Proposed Rule). While the Proposed Rule addresses a wide range of topics, one proposal would significantly reshape the patient remote monitoring landscape. Specifically, CMS proposes to allow payment for remote physiologic monitoring (RPM) and remote therapeutic monitoring (RTM) services only when such services are performed by clinical staff employed by the billing practice, and not when those services are delivered by contractors. CMS is seeking comments on the Proposed Rule by September 14, 2026.

Remote monitoring services are chronic care services that involve the collection, analysis, and interpretation of digitally collected physiologic data or digitally collected or manually input therapeutic data, followed by the development of a treatment plan and management of the patient under the treatment plan. These services may be performed by staff under the general supervision (i.e., no onsite supervision requirement) of the physician or other qualified health care professional. Currently, a physician practice can engage a third-party vendor to perform the remote setup and data collection required for the monitoring services under the physician’s general supervision, and the physician could act on that information to adjust the patient’s care plan.

The RPM and RTM provisions in this year’s Proposed Rule may represent the most consequential set of changes to remote monitoring payment policy since CMS first established separate reimbursement for these services in 2019. Among the key proposals, CMS would prohibit third-party outsourcing of RPM and RTM services by requiring that all monitoring staff be direct employees of the billing practitioner’s practice, effectively ending the outsourced monitoring model used by many digital health companies. The Proposed Rule would also impose new established-patient and initiating-visit requirements, as well as revalue practice expense (PE) inputs in ways that could reduce reimbursement. CMS is also seeking comments on consolidating the existing 17 RPM and RTM billing codes into four new G-codes. Taken together, these proposals could materially impact how remote monitoring programs are structured, staffed, and reimbursed under Medicare.

These proposals present potential compliance, operational, and financial implications for digital health companies offering remote monitoring solutions, healthcare providers and health systems offering RPM or RTM programs, third-party monitoring vendors that supply staff or technology to billing practices, and investors and acquirers evaluating health technology assets with remote monitoring revenue exposure. Organizations currently relying on outsourced monitoring staff would need to restructure or unwind those arrangements if the direct-employment requirement is finalized as proposed. Reduced PE inputs and the potential elimination of PE for treatment-management codes may also compress reimbursement, even for compliant programs. 

Breaking down the RPM and RTM changes in the Proposed Rule

The CY 2027 Proposed Rule would affect multiple aspects of how RPM and RTM programs are structured and reimbursed, including who may furnish the services, how monitoring relationships are initiated, and how each code component is valued.

The proposals:

1. Supervision and employment requirement

The most significant proposal in this section would require that RPM and RTM services be furnished only by clinical staff who are direct employees of the billing practitioner's practice. Under the proposal, practices could no longer bill for RPM or RTM services furnished by monitoring staff employed by a third-party vendor, effectively prohibiting the outsourced monitoring model prevalent today.

CMS grounds this proposal in a United States Department of Health and Human Services Office of Inspector General (OIG) report finding that 43 percent of enrollees receiving RPM services did not receive all three billed components (i.e., education/setup, device supply, and treatment management) and that some vendors engaged in unsolicited cold-calling of beneficiaries to enroll them in monitoring programs. CMS frames the direct-employment requirement as a means of ensuring clinical accountability and reducing the risk of billing for services that are not actually furnished as represented.

CMS has invited comment on how the direct-employment requirement could affect access to remote monitoring services. In particular, organizations serving rural or underserved populations, or elderly or chronically ill populations, that currently benefit from remote monitoring may evaluate whether the proposal would reduce patient access to RPM or RTM in their service areas and, if so, may elect to address those concerns in comment letters.

2. Established patient requirement

This proposal would require that RTM services be furnished only to established patients – that is, patients with whom the billing practitioner or practice already has a treatment relationship. RPM services are already subject to this requirement; the proposal would align RTM with existing RPM policy. 

3. Initiating-visit requirement

This proposal would require that the billing practitioner furnish, and separately report, a face-to-face initiating visit – which may be conducted in person or via telehealth – before RPM or RTM services begin for a given patient. This would formalize the expectation that remote monitoring is initiated as part of an existing clinical relationship rather than as a stand-alone, direct-to-consumer service. While RPM and RTM services can currently be provided incident to the billing practitioner, this proposal would further align remote monitoring services with traditional incident-to requirements for new patients. 

4. PE input revaluation

CMS emphasized its concern that, due to lack of information regarding the typical devices used to perform RPM and RTM services, the services may be overvalued. Specifically, CMS noted that it has received very little invoice or pricing information from interested parties for the specific devices used in RTM and RPM services. This proposal would revalue the PE inputs underlying several RPM and RTM Current Procedural Terminology (CPT) codes by cross-walking them to what CMS believes are other, better characterized or more accurate codes:

Current CPT code(s)	Proposed CPT code
99453, 98975 (setup/education)	PE inputs cross-walked to CPT 99473
99454 (RPM device supply)	PE inputs cross-walked to CPT 99474
98976, 98977, 98978 (RTM device supply)	PE inputs cross-walked to CPT 93270
99470, 99457, 99458, 98979, 98980, 98981 (treatment management)	PE inputs eliminated

Practically speaking, these crosswalks and eliminations could reduce reimbursement for the setup, device supply, and monitoring components of RPM and RTM programs relative to current reimbursement rates. CMS is soliciting comments on the typical devices used in RPM and RTM and the relative cost of those devices.

5. Potential consolidation into new G-codes 

CMS is additionally seeking comments on a more fundamental restructuring: Bundling the 17 existing RPM and RTM billing codes into four new Healthcare Common Procedure Coding System (HCPCS) G-codes:

• GRPM1 – RPM setup and education
  
  
• GRPM2 –  RPM monthly device supply and treatment management, including two or more days of data transmission and at least one real-time interactive communication with the patient for treatment management, totaling at least 20 minutes
  
  
• GRTM1 –  RTM setup and education
  
  
• GRTM2 – RTM monthly device supply and treatment management, including two or more days of data transmission and at least one real-time interactive communication with the patient for treatment management, totaling at least 20 minutes

Notably, the four consolidated G-codes would eliminate the short-term versus long-term distinction that CMS had previously made with RPM. Separate codes currently exist for RPM services delivered between two and 15 days versus services delivered between 16 or more days. The consolidation would also eliminate the extra-time codes for services delivered for more than 20 minutes. These changes could reduce reimbursement.

These HCPCS G-codes would adopt all current conditions of payment for the remote therapeutic and remote physiologic codes finalized in prior rulemaking, as well as the proposed established-patient, initiating-visit, and supervision requirements proposed in this rulemaking, if finalized. CMS has not proposed specific valuations for the new G-codes; instead it seeks comments before any valuation decisions are made. This is an area where detailed, data-driven comments from providers and vendors may inform the ultimate design of any consolidated coding structure.

CMS again referenced the OIG report, which identified patients who did not receive at least one of the three components (i.e., setup, device, or treatment management). However, practices could not bill for the device if the device did not represent a cost to the practice. Therefore, billing for the setup and treatment management, but not the device, may have been appropriate in certain circumstances. Accordingly, the OIG findings described by CMS may not necessarily indicate that all three components were improperly billed in every instance. 

Practical implications for providers and remote monitoring companies

• Impacted organizations may consider submitting comments – particularly on the proposed code consolidation into GRPM1, GRPM2, GRTM1, and GRTM2 and the direct-employment requirement.

• Providers currently utilizing outsourced monitoring companies for RPM and RTM may evaluate their current offerings and consider whether changes may be needed, including potentially transitioning monitoring services in-house if the rule is finalized as proposed.
  
  
• Remote monitoring vendors that supply staff, technology, or full-service monitoring programs to providers may begin reassessing their contracting and staffing models now, well ahead of any final rule.
  
  
• Providers may evaluate whether their current intake processes satisfy, or can be adapted to satisfy, the proposed established-patient and initiating-visit requirements.
  
  
• The OIG report underlying the direct-employment proposal identified specific compliance concerns – including billing for services not fully furnished and unsolicited cold-calling of beneficiaries – that could independently support enforcement action under existing law regardless of whether the Proposed Rule is finalized. Organizations may review their current RPM and RTM programs in light of these findings.
  
  
• Investors, acquirers, and lenders evaluating healthcare or digital health companies with material RPM or RTM revenue exposure may take these proposed changes into account in due diligence, valuation models, and risk assessments. 

If finalized as proposed, these provisions would require many current business arrangements – particularly those structured around third-party monitoring vendors – to be restructured. Providers, health systems, and digital health companies with RPM or RTM programs, including those structured around third-party monitoring vendors, are encouraged to review these provisions and consider whether to submit comments. Comments are due by September 14, 2026. 

For more information about the Proposed Rule or to discuss submitting comments, please contact the authors of this alert or any member of DLA Piper’s Healthcare Regulatory team.