Remote Patient Monitoring at Risk: Could Qualified Third-Party Entities—like Remote Monitoring IDTFs—Preserve Patient Access Under CMS’s Proposed Rule?

On July 16, 2026, CMS published the CY 2027 Medicare Physician Fee Schedule Proposed Rule, which contains a proposal that could reshape how remote patient monitoring services are delivered to Medicare beneficiaries. 

Key Takeaways

• CMS is proposing to require that remote physiologic monitoring (RPM) and remote therapy monitoring (RTM) services be furnished only by direct employees of the billing practitioner’s practice.
• The proposal is grounded in program-integrity concerns yet may trigger critical patient access issues.
• As CMS considers tighter restrictions on who may furnish remote patient monitoring services, it is worth asking whether other alternatives exist: Could certain qualified third-party entities be identified—including, for example, remote monitoring independent diagnostic testing facilities (IDTFs)—to furnish certain RPM/RTM services in a way that balances CMS’s program integrity concerns while preserving patient access to these services?

CMS’s Concerns and Proposed Solution

In the rule, CMS proposes that RPM and RTM services be payable only when performed by clinical staff employed by the practice and not when those services are delivered by contractors. If finalized, beginning January 1, 2027, 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 will not allow contracting out to third-party companies.” The staff need not be physically located within the practice, but staff must be direct employees working under general supervision with all “incident to” requirements at § 410.26 satisfied. In short, CMS proposes to sever the relationship between billing practitioners and third-party RPM/RTM service providers.

CMS’s rationale for this sweeping change rests largely on program-integrity concerns raised in recent OIG reports regarding remote patient monitoring. For example, a 2024 OIG report recently emphasized that Medicare “does not consider remote patient monitoring companies to be a type of provider” and “does not have a systematic way to identify companies that specialize in remote patient monitoring.” The report also found that about 43 percent of Medicare enrollees who received remote patient monitoring services did not receive all three components of it including, (i) enrollee education and device setup, (ii) device supply, and (iii) treatment management. Citing these reports, CMS concludes in the proposed rule that third-party arrangements do not “ensure the billing practitioner has adequate oversight, management, or collaboration to bill RPM or RTM services” and accordingly CMS does “not believe that the full scope of service elements required to bill these codes are being met.”

Access and Scalability Questions

While CMS’s program-integrity objectives are understandable, the proposed prohibition raises significant access and scalability concerns. Remote patient monitoring programs depend on economies of scale. Many physician practices, particularly smaller and rural ones, rely on third-party arrangements. An employee-only mandate could place RPM and RTM out of reach for those practices and their patients. CMS itself acknowledges this potential problem in its request for comments, asking for input regarding “how this policy, if finalized, could impact access to remote monitoring services.” 

Is CMS Overlooking Alternative Solutions?

The proposed rule focuses solely on the binary of employed clinical staff versus third-party service provider, without considering differences among types of third parties. This all-or-nothing framework overlooks a potential middle path that is already supported by Medicare’s regulatory infrastructure.  Rather than treating all third-party providers alike, CMS could create a category of “qualified third-party furnishing entities” defined by Medicare enrollment and supervisory protocols. For example, remote monitoring IDTFs are Medicare-enrolled, subject to supplier standards, and required to obtain written orders before providing services, thereby providing an existing layer of accountability that other vendors may lack and addressing several of the findings and recommendations in the 2024 OIG report. 

To be clear, IDTFs cannot furnish and bill for these services. CMS made this explicit in the CY 2021 Physician Fee Schedule Final Rule: “RPM services are not considered to be diagnostic tests; therefore, RPM services cannot be furnished and billed by an IDTF on the order of a physician or NPP.” That said, CMS has more recently modernized the IDTF enrollment policies to account for remote monitoring IDTFs that perform diagnostic services via computer modeling and analytics away from the physical presence of the patient, some of which relate to monitoring chronic conditions and, therefore, are arguably more therapeutic in nature. See, e.g. CY 2021 Physician Fee Schedule Final Rule (discussing home PT/INR monitoring services). But the question is not whether an IDTF can furnish and bill, but whether certain qualified third-party furnishing entities, including IDTFs as one example, could support RPM/RTM services, in collaboration with the treating physicians, providing the operational infrastructure and trained personnel that make these programs viable.

Conclusion

CMS should reconsider its employee-only approach and instead evaluate a category of “qualified third-party furnishing entities” defined by Medicare enrollment and supervisory protocols. IDTFs meet many of these criteria. This approach would allow CMS to address program-integrity concerns and align with OIG’s recommendations in its prior reports without exacerbating access issues.

CMS is accepting public comments on the proposed rule through September 14, 2026. Stakeholders who share this view, or who rely on third-party arrangements to deliver remote patient monitoring services at scale, should consider submitting comments encouraging CMS to explore regulatory alternatives that preserve both program integrity and patient access.

If you have any questions about this proposed rule or need assistance with health care matters, please reach out to the authors of this post or to your Reed Smith contact.