As RPM Use Soars, CMS Proposes Tighter Rules for Third-Party Vendors

CMS proposed to ban third-party vendors from providing remote patient monitoring services (RPM) and remote therapeutic monitoring (RTM) services on behalf of doctors. The proposed policy could disrupt a rapidly growing Medicare market, where a CareSet analysis found that RPM utilization more than tripled between 2021 and 2025.

Released July 14, CMS’s proposed rule for the 2027 Medicare Physician Fee Schedule would allow Medicare to pay for RPM and RTM services only when they are performed by clinical staff employed by the health care provider billing Medicare, effective January 1, 2027.

“[W]e believe outsourcing RPM/RTM services to a third party 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,” regulators wrote in the proposed 2027 PFS rule.

Currently, health systems and other primary care providers are allowed to bill Medicare for services delivered through third-party vendors.

RPM and RTM Utilization Grew Substantially  

A CareSet analysis of monthly Medicare fee-for-service (FFS) claims found substantial growth in remote monitoring between 2021 and 2025. RPM claims increased from 2.5 million in 2021 to 8.8 million in 2025, while RTM claims grew from 87,105 in 2022 to more than 810,000 in 2025. Fewer than 30% of RPM claims were associated with Medicare FFS beneficiaries who were dually eligible for Medicare and Medicaid.

Among all RPM services, CPT code 99457, which covers the first 20 minutes of remote monitoring treatment management services provided by a physician or other qualified health care professional each month, became the most frequently billed code beginning in 2022. CPT code 99454, which covers the supply and data transmission of an RPM device over a 30-day period, was the most frequently billed code in 2021 but has ranked second since 2022.

Between January 2022 and December 2025, Medicare FFS recorded a total of 1,964,250 RTM claims, with annual claims increasing from 87,105 claims in 2022 to 810,950 claims in 2025. The monthly number of Medicare FFS beneficiaries receiving at least one RTM service increased from 800 in January 2022 to 62,545 in December 2025.

CPT codes 98977 and 98980 were the most frequently used RTM codes, accounting for 28.5% and 27.7% of total RTM claims, respectively. Code 98977 covers device supply for remote monitoring of the musculoskeletal system, while 98980 covers the first 20 minutes of RTM treatment management.

The proposed PFS rule also would extend the established-patient requirement, which already applies to RPM services, to RTM services. In addition, CMS would require providers to see patients in a separately reportable initiating visit before a practitioner could begin billing for either RPM or RTM.

CMS is accepting public comments on the proposed rule through September 14.

OIG Reports Recommend Oversight of RPM 

The proposed changes come as the Trump administration moves to address fraud and wasteful spending in the Medicare program. 

A 2024 report from the HHS Office of Inspector General (OIG) found that 43% of Medicare enrollees who received RPM did not receive at least one of three components of monitoring: education and setup, device supply and treatment management.

Another OIG report, released in 2025, found that some practices may not be utilizing RPM to effectively treat patients’ conditions and were billing for medically unnecessary devices or monitoring.

Industry groups are pushing back against the proposal. The Alliance for Connected Care, a non-profit organization, is inviting organizations to sign an open letter opposing the changes. 

“If finalized, these proposals would cause immediate and significant disruption for Medicare beneficiaries who rely on remote monitoring to manage chronic conditions, avoid preventable complications, and remain connected to their care teams,” the letter wrote.

ATA Action, the advocacy arm of the American Telemedicine Association, also criticized the proposal, saying it could significantly “scale back” third-party remote patient monitoring services and undermine bipartisan efforts to protect access to care in rural and underserved communities.