What Is the CMS RPM Outsourcing Ban?
As of September 2026, CMS has proposed a rule in the CY 2027 Medicare Physician Fee Schedule (CMS-1848-P) that would prohibit medical practices from billing Medicare for remote patient monitoring and remote therapeutic monitoring services performed by outsourced third-party clinical staff. If finalized, only direct employees of the billing practitioner or practice would qualify for RPM and RTM reimbursement, effective January 1, 2027.
Who it affects: Any practice using an outside vendor’s clinical staff to perform RPM or RTM monitoring, data review, or treatment management billed to Medicare.
What to do: Evaluate whether your current remote monitoring staff qualify as direct employees under the billing practitioner’s general supervision.
Timeline: The comment period closed September 14, 2026. A final rule is expected this fall with a proposed January 1, 2027 effective date.
What Changed in the CY 2027 Proposed Rule
On July 14, 2026, CMS released the Calendar Year 2027 Medicare Physician Fee Schedule proposed rule. The most significant remote monitoring provision is a requirement that RPM and RTM services be furnished exclusively by clinical staff who are direct employees of the billing practitioner or the practitioner’s practice.
Under current rules, practices can outsource RPM and RTM monitoring to third-party companies whose staff perform the clinical work on the practice’s behalf. That arrangement has been the dominant model since Medicare created the RPM billing codes in 2019. CMS is now proposing to end it.
The restriction does not require clinical staff to be physically located in the practice. Remote employees still qualify, as long as they are directly employed by the billing practice and work under the billing practitioner’s general supervision. The critical distinction is the employment relationship, not the work location.
CMS also proposes limiting RTM to established patients, requiring an initiating visit before RPM or RTM begins, and is seeking comment on consolidating the current 17 RPM and RTM billing codes into four simplified G-codes.
Who Does the RPM Staffing Restriction Apply To?
The restriction applies to any practice that bills Medicare for RPM (CPT 99453 through 99458) or RTM (CPT 98975 through 98981) services using clinical staff employed by a third-party vendor rather than by the practice itself. This includes monitoring companies, remote care management firms, and any outside organization whose staff perform clinical functions billed under the practice’s NPI.
Practices that already employ their own remote monitoring staff are not directly affected. The distinction CMS draws is between employed and outsourced, not between on-site and remote. A registered nurse working from home as a W-2 employee of the billing practice would satisfy the proposed rule. The same nurse doing the same work for a contracted RPM vendor would not.
Technology vendors are not targeted. Practices can still purchase devices, platforms, software, and analytics from outside companies. Only the clinical monitoring work, the person reviewing data, contacting patients, and documenting treatment management, must be performed by a direct employee.
In our experience working with medical practices that use virtual medical assistants for remote support, the staffing model matters more than the location. Practices that treat their remote staff as embedded team members are already operating closer to the model CMS is proposing.
Why CMS Is Targeting Outsourced Monitoring
This proposal is the culmination of years of enforcement activity. In November 2023, the HHS Office of Inspector General issued a consumer alert flagging aggressive RPM solicitation by third-party companies. In September 2024, OIG documented billing irregularities in outsourced monitoring arrangements. By August 2025, OIG released a data snapshot reinforcing its concerns, and the Department of Justice settled its first False Claims Act case targeting RPM billing misconduct.
CMS stated in the proposed rule that outsourcing RPM and RTM services “can fragment care, lead to insufficient involvement and oversight of the billing practitioner, or result in services that do not actually represent or facilitate all required aspects of RPM or RTM services.” The agency cited arrangements where outsourced staff have little or no relationship with the patient or care team.
One question we hear constantly from practice managers is whether remote monitoring is still worth the investment if the rules tighten. The short answer: yes, for practices that build the program around genuine clinical workflows rather than billing convenience. The programs that work are the ones where monitoring staff function as part of the care team.
How Will the RPM Outsourcing Ban Affect Practice Operations and Costs?
The impact depends on how a practice’s current program is structured. Practices that already employ their own monitoring staff face minimal disruption. Practices that rely on outsourced vendors face a significant restructuring. CMS is also proposing to reduce practice expense reimbursement for several RPM and RTM codes, which tightens margins further.
| Factor | Outsourced Vendor (Current) | Direct Employee (Proposed) |
| Staff employment | Employed by the vendor; practice bills under its NPI | W-2 employee of the practice; remote work permitted |
| Supervision | Often minimal; vendor manages day-to-day | General supervision by the billing practitioner |
| Patient relationship | Vendor staff may have no relationship with patient | Staff embedded in the practice’s care team |
| Compliance risk | Higher; could trigger False Claims Act exposure | Lower; aligned with proposed CMS requirements |
| Reimbursement | At risk if finalized; no payment for outsourced clinical work | Eligible for full reimbursement at proposed rates |
For practices running RPM programs with 50 to 200 patients, the difference between maintaining an outsourced model and transitioning to direct employees can range from $2,000 to $8,000 per month in net reimbursement at risk, depending on payer mix and RPM-eligible patient volume.
What Practices Should Do Now to Prepare
The proposed rule is not final. CMS may revise or soften provisions after reviewing public comments. However, waiting until the final rule drops leaves no runway if the restriction survives. Start evaluating now.
1. Audit your RPM and RTM staffing model. Determine whether the clinical staff performing monitoring and treatment management are direct employees of your practice or employees of a third-party vendor.
2. Model the financial impact. Calculate current RPM revenue against proposed reimbursement rates plus the cost of directly employing monitoring staff.
3. Evaluate your vendor contracts. Identify which vendor functions are clinical (monitoring, patient outreach, treatment management) and which are non-clinical (device supply, platform, logistics). Only clinical functions are subject to the restriction.
4. Explore hiring remote clinical staff as direct employees. Practices that cannot add on-site staff should consider virtual nurse assistants who work remotely under the practice’s supervision.
5. Review incident-to documentation. RPM and RTM services must meet incident-to billing requirements under 42 C.F.R. section 410.26. Ensure your supervision documentation and clinical protocols are current.
6. Prepare for the initiating visit requirement. Build a separately billable face-to-face visit into your intake workflow so every RPM patient has documented consent on record.
7. Monitor the final rule release. CMS typically publishes the final PFS in November with a January 1 effective date. Provisions may change from the proposed text.
If the proposed RPM staffing restriction is pushing your practice to rethink how remote monitoring gets done, DoctorsVA provides trained, HIPAA-compliant virtual medical assistants and virtual nurse assistants who work as dedicated members of your care team, under your supervision, inside your EHR.
Common Mistakes When Restructuring RPM Staffing
Assuming the rule will not be finalized. The American Telemedicine Association has predicted CMS may soften the restriction based on opposition comments. But practices that bank on a reversal and take no preparatory steps risk having no compliant staffing model and 90 days to build one.
Relabeling vendor staff as employees without changing the relationship. Calling a contractor an employee on paper does not satisfy the rule if W-2 status, supervision structure, and incident-to compliance do not actually change. CMS and OIG look past labels to the substance.
Dropping RPM entirely instead of restructuring. For practices with a chronic care population, shutting down remote monitoring costs more in missed interventions and avoidable ED visits than the program costs to run. The providers we work with who run effective monitoring programs consistently report that clinical value exceeds the billing value.
Confusing technology vendors with clinical service vendors. The rule does not prohibit purchasing RPM devices, software, or data platforms from outside companies. It restricts who performs the clinical monitoring work. Terminating platform contracts solves the wrong problem.
In-House Monitoring vs. Outsourced Vendors
CMS’s position is that outsourced monitoring creates care fragmentation. When a vendor’s staff review patient data and contact patients about abnormal readings but have no established relationship with the patient or billing provider, the monitoring becomes disconnected from the care plan. The patient talks to someone who does not know their history, and the provider may never see the monitoring data.
The alternative is hiring remote clinical staff who work as embedded members of the practice team. A virtual nurse assistant who works exclusively for your practice, accesses your EHR, and reports directly to your providers is not an outsourced vendor. That person is your employee doing remote work. Learn more about how virtual nurse assistant services support clinical monitoring for medical practices.
CMS explicitly stated that clinical staff do not need to be physically located in the practice. Remote employees qualify. The rule targets the employment relationship, not the location. For practices exploring how to build or restructure a remote monitoring program with embedded clinical support, our remote patient care coordinator and telemonitoring services are built for exactly this model.
Frequently Asked Questions
Is the CMS RPM outsourcing ban finalized?
No. As of September 2026, it is a proposed rule in the CY 2027 Medicare Physician Fee Schedule (CMS-1848-P). The comment period closed September 14, 2026. CMS is expected to issue the final rule this fall, with provisions taking effect January 1, 2027, if finalized.
Can I still use a third-party RPM platform under the proposed rule?
Yes. The restriction targets who performs the clinical monitoring work, not the technology. Practices can still purchase devices, software, and analytics from outside vendors. The clinical staff reviewing data and performing treatment management must be direct employees.
Do remote employees count as direct employees under the proposed rule?
Yes. CMS clarified that clinical staff do not need to be physically located at the practice. Remote employees qualify as long as they are directly employed (W-2), work under the billing practitioner’s general supervision, and meet incident-to billing requirements.
What happens if I continue billing RPM with outsourced staff after the rule takes effect?
If finalized as proposed, billing Medicare for RPM or RTM performed by third-party vendor staff would result in non-reimbursable claims. Continued billing under a non-compliant arrangement could also create False Claims Act exposure given OIG and DOJ enforcement activity in this area.
Does the proposed rule affect RTM the same way as RPM?
Yes. Both RPM and RTM are subject to the direct-employment requirement. CMS also proposes extending the established-patient requirement to RTM and requiring an initiating visit before either service begins.
What is the initiating visit requirement in the proposed rule?
The billing practitioner must conduct a separately billable face-to-face visit before RPM or RTM services begin to assess clinical appropriateness, discuss the service, and obtain consent. This visit can be billed independently from RPM or RTM codes.
Next Steps
Need remote clinical staff who work as part of your team? See how virtual nurse assistants handle monitoring, triage, and care coordination.
Building a monitoring program? Learn how remote patient care coordinators manage the patient journey from enrollment through follow-up.
Explore all options at our services overview.
The CMS proposed rule is reshaping how practices staff remote monitoring. DoctorsVA matches your practice with trained, HIPAA-compliant virtual medical assistants, nurse assistants, and patient coordinators who integrate directly into your team and your EHR. No third-party billing complications. No compliance gaps.