States are pouring billions into remote monitoring and virtual care infrastructure to address rural access gaps, but federal reimbursement changes could undermine the financial model many providers use to deliver those services.
In July, the Centers for Medicare and Medicaid Services (CMS) proposed changes to remote physiologic monitoring (RPM) and remote therapeutic monitoring (RTM) reimbursement that stakeholders say would make many programs difficult to sustain. The policy change, tucked inside a hefty Medicare physician pay draft rule, marks a shift with far-reaching implications for RPM companies, primary care physicians, hospitals and health systems by eliminating third-party vendors.
Medicare is aiming to tighten the rules around remote physiologic monitoring (RPM) and remote therapeutic monitoring (RTM). Under the draft rule, Medicare will only allow payment for RPM or RTM services when furnished by clinical staff employed by the practice, effective January 1, 2027.
If finalized, for the purposes of billing Medicare, 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, regulators wrote in the draft rule.
The change was driven by CMS' concerns about program integrity and vendors offering low-quality care. Payments for remote patient monitoring jumped 31% from $408 million in 2023 to $536 million in 2024, according to a 2025 report. In 2024, nearly 1 million enrollees received these services, up 27% from 2023.
CMS is accepting public comments on the PFS rule until 11:59 pm tonight (Monday, Sept. 14). The rule has received nearly 40,000 comments so far.
Major tech organizations are urging CMS to reconsider the proposed changes to remote monitoring policies to preserve patients' access to these tech-enabled services.
"We are deeply concerned that the effect of the proposed remote monitoring policies would be the loss of access to care for millions of Medicare beneficiaries, with particularly severe consequences for rural communities and patients served by small and independent practices," the Alliance for Connected Care wrote in its comments to CMS about the proposed CY2027 policies under the Physician Fee Schedule rule.
"At minimum, CMS should delay implementation and work with stakeholders to develop a more balanced approach that preserves beneficiary access while establishing targeted, evidence-based safeguards against fraud, waste, and abuse," the Alliance wrote.
ATA Action, the legislative and regulatory advocacy arm of the American Telemedicine Association, also voiced concerns about CMS' proposal to impose a new direct-employment requirement on clinical staff furnishing remote physiologic monitoring (RPM) and remote therapeutic monitoring (RTM) services, as well as related payment changes.
"As proposed, these changes could make RPM and RTM financially and operationally unworkable for many physician practices and health systems, particularly smaller practices and rural providers that rely on contracted or shared staffing arrangements to deliver these services," the organization warned in its letter to CMS.
If the changes are enacted as proposed, "many physician practices and health systems will be forced to reduce enrollment, terminate existing programs or discontinue remote monitoring altogether," ATA Action wrote.
As a result, patients could lose established connections with care teams for reasons unrelated to their clinical needs, and patients could face delays in enrollment following hospitalization, medication changes, new diagnoses, or worsening chronic conditions, ATA Action said. The organization cited a children’s hospital that operates a remote monitoring department that manages approximately 300 patients each month across 17 programs and has served more than 1,200 children with conditions including congenital heart disease, heart transplantation, ventricular assist devices, peritoneal dialysis, type 1 diabetes and postoperative recovery.
Health systems also face workforce shortages. For rural providers, the problem is even more acute because the available clinical workforce is already limited.
In August, more than 230 healthcare organizations, including hospitals, health systems, patient advocacy groups and provider organizations, signed a letter pressing CMS not to finalize proposed changes to remote physiologic and therapeutic monitoring, warning the policies could disrupt care for more than 1 million Medicare beneficiaries who rely on these services.
While CMS considers these changes to RPM policies, states are investing heavily in RPM-enabled care through the $50 billion Rural Health Transformation Program (RHTP). According to an Alliance for Connected Care analysis, 22 states have announced roughly $240 million in RPM-specific funding and 35 states have identified more than $2.4 billion in broader technology investments that could support remote monitoring.
Nearly all 50 states incorporated remote monitoring into their RHTP plans, often relying on outside partners to help rural providers build and operate programs at scale, the analysis found.
"States have made clear that remote monitoring is central to how they intend to deliver sustainable, high-quality chronic care in rural communities," the Alliance for Connected Care report notes. "Most rural providers do not have the capacity or resources to build these programs on their own — they are counting on vendor partnerships to make RPM work at scale."
If the CY2027 PFS is finalized as proposed this year, the investments in remote monitoring infrastructure would be unsustainable, given a lack of Medicare reimbursement for the services and outcomes the funding is designed to enable. "If rural hospitals cannot use vendors to deploy the remote monitoring that patients need, the state may not be able to meet its RHTP goals, leading to CMS clawbacks and a decrease in funding to the state in future years. CMS is potentially jeopardizing the state’s RHTP dollars with this proposal," the organization wrote in the report.
CMS' Rural Health Transformation Program emphasizes workforce development, sustainable access, innovative care and technology innovation in rural communities.
"A federal policy that simultaneously encourages rural technology-enabled care while making established remote monitoring partnerships unavailable would work against those objectives, leave rural providers with fewer tools to serve their patients, and push care back toward more costly emergency departments, hospitals, and institutional settings," ATA Action wrote in its comments.
The proposal could price federally qualified health centers and rural and safety net hospitals out of providing RPM entirely, according to many healthcare leaders.
"This is very resource-intensive. It works, we know it works, but there are a lot of resources you have to add, and with where we're headed with reimbursement and regulatory issues, how do we make this a sustainable model that is outside of academic centers and really large healthcare systems that have the ability to drive some of that, but how do we scale that broadly? I think it's something we're still sorting through, and there's a lot of important conversations to be had around that," said Nathan Starr, DO, senior medical director, proactive care home services at Intermountain Health, during an American Heart Association webinar focused on remote patient monitoring.
Clincial evidence supporting the use of remote patient monitoring technologies continues to grow. A 2025 systematic review and meta-analysis in JMIR mHealth and uHealth pooled 40 randomized controlled trials and found that RPM likely reduced the proportion of patients hospitalized, lowered the number of hospitalizations, and shortened hospital length of stay compared with usual care.
Condition-specific evidence is particularly strong in cardiac care. A systematic review and meta-analysis published in the Cureus Journal of Medical Science found that RPM used in heart failure management decreases hospitalizations and improves quality of life.