CMS 2027 Medicare Proposed Rule: Will CMS Ban Third-Party RPM Companies?

The CMS Calendar Year 2027 Physician Fee Schedule (PFS) proposed rule could significantly change how Medicare-funded Remote Patient Monitoring (RPM) and Remote Therapeutic Monitoring (RTM) programs are staffed and delivered.

One proposal is receiving particular attention from medical practices and RPM companies:

CMS proposes to allow Medicare payment for RPM and RTM services when they are performed by clinical staff employed by the practice, rather than when those services are delivered by contractors.

That has led to a common question:

Is CMS banning third-party RPM companies in 2027?

Quick Answer

CMS is not proposing a ban on third-party RPM companies.

Instead, CMS is proposing to restrict Medicare payment for RPM and RTM services when the clinical staff performing those services are contractors rather than employees of the billing practice.

This distinction matters.

A third-party company may provide technology, devices, software, connectivity, administrative support, or other services. The key issue under the proposal is who performs the clinical staff work associated with the billable RPM or RTM service.

The CY 2027 rule is a proposed rule, not a final rule. CMS issued the proposal on July 14, 2026 and the public comment period closed September 14, 2026. The final policy could differ from the proposal.

For medical practices, the most important question is therefore not simply whether they use a third-party RPM vendor. It is who performs the clinical work, who employs those clinical staff and how the arrangement is structured.

What Is the CMS 2027 Proposed Rule?

The Calendar Year 2027 Medicare Physician Fee Schedule proposed rule, identified by CMS as CMS-1848-P, contains proposed changes to Medicare payment and coverage policies beginning January 1, 2027.

Among the proposed changes are several policies affecting remote monitoring.

CMS proposes to:

• Require RTM services to be furnished only to established patients.
• Require practitioners reporting RPM or RTM to furnish a separately reportable initiating visit when RPM or RTM services begin.
• Allow payment for RPM and RTM services when performed by clinical staff employed by the practice, rather than when those services are delivered by contractors.
• Modify how RPM and RTM services are valued under the Physician Fee Schedule.
• Seek comments on potentially replacing the existing RPM and RTM code structure with four new HCPCS G-codes.

These are proposals. They should not be presented as final Medicare requirements until CMS publishes the final rule.

Related reading: CMS 2027 RPM Update

What Does CMS Propose for Third-Party RPM Companies?

The most important proposed change for outsourced RPM programs concerns clinical staff employment.

CMS says it is proposing to allow payment for RPM and RTM services only when performed by clinical staff employed by the practice and not when those services are delivered by contractors.

In practical terms, this could affect RPM arrangements where a medical practice contracts with a company that supplies the nurses, medical assistants, or other clinical personnel who perform the billable monitoring work.

For example:

Current arrangement:
Practice → Third-party RPM company → Contracted clinical staff → Patient monitoring

If CMS finalizes the proposal as written, this type of arrangement would require careful review because the clinical staff performing the RPM or RTM service would not be employees of the practice.

A different arrangement could look like:

Potential structure:
Practice → Practice-employed clinical staff → Patient monitoring

with a technology company providing:

• RPM software
• Devices
• Connectivity
• Data transmission
• Technical support
• Reporting tools
• Other technology infrastructure

Whether a particular arrangement complies with the final rule will depend on the final CMS requirements and the specific services and contracts involved.

Is CMS Banning Third-Party RPM Companies?

No, not as a blanket prohibition.

This is one of the most important distinctions to make when discussing the CMS 2027 proposal.

CMS is proposing a restriction on payment for RPM and RTM services performed by contracted clinical staff.

That is different from saying:
"CMS is banning every third-party company involved in remote patient monitoring."

The proposed rule does not state that practices can no longer obtain every RPM-related service from outside companies.

Instead, practices should separate the different components of an RPM program.

RPM function	Question to ask
Clinical monitoring	Who performs the clinical work?
Clinical staff	Who employs the staff?
Patient communication	Who communicates with the patient?
Documentation	Who documents the clinical interaction?
Device	Who supplies the device?
Software	Who provides the technology platform?
Connectivity	Who transmits the data?
Technical support	Who supports the technology?
Billing	Who submits the Medicare claim?

This distinction is especially important for independent practices that use a "full-service" RPM company.

A vendor may provide multiple services under one contract, but the proposed CMS policy focuses specifically on the clinical staff performing the RPM or RTM services.

Why Is CMS Proposing This Change?

CMS's proposal follows concerns about the growth and oversight of remote monitoring services.

CMS references recent Office of Inspector General findings when discussing the proposed changes to RPM and RTM.

The OIG has reported concerns about remote monitoring utilization and whether beneficiaries received all components of RPM services. CMS's proposed changes are intended, in part, to strengthen the connection between the billing practitioner, patient and clinical service.

The proposal should therefore be understood in the context of Medicare program integrity, medical necessity, patient relationships and accountability for clinical services.

This is important because RPM is not simply a technology service.

Medicare RPM involves clinical services connected to the collection and management of patient physiologic data.

CMS is proposing to place greater emphasis on the relationship between the practice billing Medicare and the clinical staff performing the service.

What Does the OIG Have to Do With the CMS 2027 RPM Proposal?

The Office of Inspector General has examined the growth and use of remote patient monitoring.

CMS cites OIG findings when explaining why it believes changes to the RPM and RTM coding and delivery structure may be necessary.

This does not mean that every third-party RPM company is improper or noncompliant.

That distinction is important.

The existence of an outsourced RPM arrangement does not, by itself, establish fraud, abuse, or inappropriate care.

The policy question CMS is addressing is broader: how Medicare should structure payment and accountability for remote monitoring services.

Healthcare organizations should therefore avoid describing the proposed rule as evidence that all outsourced RPM programs are fraudulent or inappropriate.

What Could the CMS 2027 Proposal Mean for RPM Companies?

The impact could vary considerably depending on the RPM company's business model.

Not every RPM vendor performs the same function.

Some companies primarily provide technology. Others provide devices and connectivity. Some provide clinical monitoring staff. Others provide nearly the entire RPM workflow.

The proposed employment restriction is particularly relevant to companies that furnish clinical staff to medical practices as contractors.

Turnkey RPM Companies

A turnkey RPM company may provide:

• Patient enrollment
• Devices
• Software
• Data monitoring
• Clinical staff
• Patient calls
• Documentation
• Billing support

If the clinical staff component is furnished through contractors, that part of the business model could require significant restructuring if CMS finalizes its proposal.

RPM Technology Companies

Technology companies may have a different role.

A vendor that provides:

• RPM software
• Patient dashboards
• Device connectivity
• Data transmission
• Alerts
• Reporting
• Technical support

is not necessarily providing the same service as a company that supplies the clinical staff.

The proposed rule therefore makes it important to distinguish technology services from clinical services.

Device Companies

RPM devices are another separate component.

A vendor may supply blood pressure monitors, weight scales, pulse oximeters, glucose-related devices, or other technology used to collect patient information.

The proposed clinical-staff employment restriction should not automatically be interpreted as a prohibition on obtaining devices from an outside supplier.

What Could the Proposed Rule Mean for Independent Medical Practices?

Independent practices should look closely at their existing RPM arrangements.

The first question should be:
Who is actually performing the clinical work?

A practice should be able to identify:

• Who reviews patient data?
• Who determines whether patient follow-up is needed?
• Who communicates with the patient?
• Who documents the clinical interaction?
• Who employs the clinical staff?
• Who supervises the clinical work?
• Who bills Medicare?

These questions can help the practice understand whether its existing RPM model could be affected.

Related reading: Who Can Bill RPM and RTM Under CMS 2027 Rules?

Does the CMS Proposal Mean Practices Must Stop Using RPM Vendors?

No.

The proposal does not establish a blanket prohibition on all third-party RPM vendors.

Instead, practices should examine exactly what the vendor provides.

For example, a practice may obtain:

• Clinical services from practice-employed clinical staff,

while obtaining:

• Technology services from an outside company.

That is conceptually different from a vendor providing both the technology and the clinical staff as contractors.

The final CMS rule will determine the precise requirements.

For that reason, practices should avoid making major contractual or staffing decisions based only on the phrase "third-party RPM ban."

Third-Party RPM Vendor vs. RPM Technology Partner

The CMS proposal could make this distinction increasingly important.

Third-party clinical staffing model

The vendor provides:

• RPM technology
• Devices
• Clinical staff
• Patient monitoring
• Clinical communications

The practice bills Medicare for RPM services.

This model deserves careful review if CMS finalizes the proposed contractor restriction.

Technology partner model

The practice maintains its own clinical staff while an outside company provides:

• RPM platform
• Devices
• Connectivity
• Data transmission
• Alerts
• Reporting
• Technical support

This is a different operating model.

However, practices should not assume that any particular vendor arrangement is automatically compliant. The final rule and the actual contractual and operational structure matter.

What Other RPM Changes Did CMS Propose for 2027?

The third-party staffing issue is only one part of the proposal.

CMS also proposes other important RPM and RTM changes.

Initiating Visit Requirement

CMS proposes that practitioners reporting RPM or RTM services furnish a separately reportable initiating visit associated with the start of RPM or RTM services.

This proposed requirement would create an additional step before monitoring begins.

Established-Patient Requirement for RTM

CMS proposes that RTM services be furnished only to established patients.

This would be an important consideration for practices that use RTM for new patients.

Potential RPM and RTM Code Restructuring

CMS is also seeking comments on an alternative coding structure that would replace the existing RPM and RTM CPT code families with four new HCPCS G-codes.

This is a proposal for comment, not a final coding structure.

Practices should therefore avoid rebuilding their billing systems around the proposed G-codes until CMS issues definitive policy.

Related reading: CMS 2027 RPM and RTM CPT Code Changes

What Should Independent Practices Do Now?

The final 2027 rule will determine what requirements ultimately apply.

However, practices can begin reviewing their current RPM arrangements now.

1. Identify Who Performs the Clinical Work

Map the RPM workflow from beginning to end:

Patient → Device → Data → Clinical Review → Patient Communication → Documentation → Billing

Identify the person or organization responsible for every step.

2. Review Your RPM Contract

Look at the actual agreement rather than relying on the vendor's marketing description.

Determine whether the vendor provides:

• Technology
• Devices
• Clinical staff
• Patient monitoring
• Patient communications
• Documentation
• Billing support
• Administrative services

3. Ask Your RPM Vendor About Its 2027 Plan

Independent practices should ask vendors questions such as:

• Do you provide clinical staff?
• Are those staff employees or contractors?
• How would your model change if CMS finalizes the proposal?
• Will technology services continue?
• Will device services continue?
• Would existing contracts need to change?
• How will clinical staffing be handled?

Getting these answers early can help practices understand their options.

4. Evaluate Internal Staffing

If a practice currently relies on vendor-supplied clinical staff, it should evaluate whether it has the capacity to perform the clinical work internally.

Consider:

• Current clinical staffing
• RPM patient volume
• Expected monitoring workload
• Clinical supervision
• Documentation
• Payroll
• Training
• Technology
• Patient communication workflows

There is no CMS requirement in the proposed rule establishing a universal 50-, 75-, or 100-patient RPM threshold.

Practice-specific staffing decisions should therefore not be presented as CMS mandates.

Related reading: CMS 2027 RPM Practice Cost Changes

5. Monitor the Final Rule

This is critical.

The CY 2027 PFS document is a proposed rule.

CMS issued the proposal on July 14, 2026. The public comment period closed September 14, 2026. The final rule will determine what policies ultimately take effect.

What Happens to RPM After the CMS 2027 Proposal?

Remote patient monitoring is not disappearing.

The proposed rule is about how Medicare pays for and structures RPM and RTM services, including who performs the clinical staff work.

For practices, the potential shift is from a model where a third-party company may supply both technology and clinical staff toward arrangements in which the practice maintains the clinical staffing relationship.

For technology vendors, the proposal may increase the importance of separating:

technology infrastructure
from
clinical staffing and clinical decision-making.

The final policy will determine exactly how these arrangements can operate beginning in 2027.

CMS 2027 Third-Party RPM Ban: What Practices Need to Know

The phrase "CMS 2027 third-party RPM ban" is useful for understanding what people are searching for, but it is not the most precise description of the proposed policy.

The more accurate description is:

CMS proposes to allow Medicare payment for RPM and RTM services when performed by clinical staff employed by the practice, rather than when those services are delivered by contractors.

That distinction is important for physicians, practice administrators, RPM companies and healthcare technology vendors.

The proposal does not mean that every third-party RPM technology company must disappear.

Instead, practices need to understand who provides the clinical work, who employs the clinical staff, what the vendor provides and how the arrangement is billed to Medicare.

Frequently Asked Questions

Is CMS banning third-party RPM companies in 2027?

No. CMS has not proposed a blanket ban on all third-party RPM companies. CMS has proposed allowing payment for RPM and RTM services when performed by clinical staff employed by the practice and not when those services are delivered by contractors.

Does CMS require RPM nurses to be W-2 employees?

CMS proposes that clinical staff performing RPM and RTM services be employed by the practice rather than contractors. We explain what this could mean for RPM staffing in our guide to the proposed W-2 employment model.

Can a medical practice still use an RPM software vendor?

The proposed rule addresses the clinical staff performing RPM and RTM services. It should not automatically be interpreted as a prohibition on obtaining technology, devices, software, connectivity, or technical support from outside companies.

The specific arrangement should be reviewed against the final rule.

Can an RPM company still provide devices?

The proposed clinical-staff restriction should not automatically be interpreted as a prohibition on third-party device suppliers.

The practice should distinguish device and technology services from the clinical staff services addressed by CMS's proposal.

Does the proposed rule apply to RTM?

Yes. CMS's proposed clinical-staff employment restriction applies to both RPM and RTM. CMS is also proposing that RTM services be furnished only to established patients.

When would the CMS 2027 RPM changes take effect?

The proposed policies are intended for CY 2027, with policies proposed to be effective January 1, 2027. However, the current document is a proposed rule. The final CY 2027 rule will establish the final requirements.

Is the CMS 2027 RPM rule final?

No. The CY 2027 Physician Fee Schedule document is a proposed rule. CMS opened the proposal for public comment, with the comment period closing September 14, 2026.

Should practices cancel their RPM vendor contracts?

Not based solely on the proposed rule.

Practices should first determine what their vendor actually provides, who performs the clinical work, who employs the clinical staff and how the arrangement is structured.

The final CMS rule should be reviewed before making definitive compliance decisions.

Bottom Line for Independent Practices

The CMS CY 2027 PFS proposed rule could materially change the way some outsourced RPM and RTM programs operate.

But calling it a "third-party RPM ban" is too broad.

The key proposed change is more specific:

CMS proposes to allow payment for RPM and RTM services when performed by clinical staff employed by the practice, rather than when those services are delivered by contractors.

For independent practices, the next step is not necessarily to abandon RPM.

It is to understand the structure of the program.

Review:

• Who employs the clinical staff?
• Who performs the clinical monitoring?
• Who communicates with patients?
• Who documents the service?
• Who provides the technology?
• Who supplies the devices?
• Who submits the claim?
• What does the vendor contract actually say?

The final CY 2027 rule will determine which proposed policies become Medicare requirements.

Until then, practices and RPM companies should treat the employment restriction as a proposed policy change that requires preparation and monitoring, not as an already-finalized third-party ban.

Source:
https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-notices/cms-1848-p
https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2027-medicare-physician-fee-schedule-proposed-rule