CMS revises Medicare remote patient monitoring standards

The Medicare Physician Fee Schedule 2027 Final Rule, which was just published in the Federal Register, will revise Medicare billing policies for remote physiologic monitoring (RPM) and remote therapeutic monitoring (RTM) starting January 1, 2027, for the initiating visit and RTM established patient requirements and for RPM and RTM valuation adjustments, and in 2029 for a new direct employment requirement for clinical staff.

As set forth in the Final Rule, the Centers for Medicare & Medicaid Services (CMS) finalized the following RPM and RTM policy changes:

• Established patient requirement

Starting January 1, 2027, the established patient requirement (which currently applies to RPM) will extend to RTM, making it a condition of payment for both RPM and RTM. CMS recognizes that a beneficiary may be considered an established patient after an initiating visit.

CMS clarified that it is adopting the definition of “established patient” that applies to other services under the Medicare Physician Fee Schedule. CMS explained that an established patient is one who received any professional services from the billing practitioner or another physician or qualified health care professional of the same specialty in the same group practice within the past three years, but noted that for some healthcare professionals, such as physical therapists, occupational therapists, and speech-language pathologists, an established patient is a patient who receives services that are furnished under a therapy plan of care that may extend throughout the length of that episode of care.

• Initiating visit requirement

RPM or RTM services that commence after 2026 will need to be initiated by the billing practitioner during a face-to-face (in-person or telehealth) visit in association with the monitoring that includes discussion of the RPM or RTM services, although remote patient monitoring does not need to be the sole purpose of the visit. CMS reasoned that RPM and RTM services require care coordination that cannot be effective without appropriate evaluation of the patient's needs, and that an initiating visit is the best way to ensure this evaluation occurs.

Although the initiating visit has been described as separately billable, CMS stated that the initiating visit can be separately billable but, in some scenarios, does not need to be billable. For example, CMS referred to RPM or RTM during a global surgery period.

CMS stated that an initiating visit will only be required before the onset of RPM or RTM, and that a separate visit is not required for routine clinical changes, such as a change of device, clinical change, or change of billing practitioner within the same practice.

An initiating visit will not be required for Medicare beneficiaries who continue to receive RPM or RTM services that they were already receiving prior to 2027 if all other requirements are satisfied, although CMS warned against misuse in enrolling beneficiaries in RPM or RTM.

• Valuation adjustments

RPM and RTM valuation adjustments (resulting in payment reductions) will be phased in over two years (2027 and 2028) because RVU reductions will exceed 20%.

• Direct employment requirement for clinic staff

Starting in 2029 the billing practitioner’s practice will be required to directly employ clinical staff members who perform the monitoring under the RPM or RTM codes, so outsourced vendor staffing will no longer be allowed unless the rule is modified before the scheduled 2029 effective date.

CMS clarified that the direct employment requirement will not prevent the use of a vendor’s technology platform or obtaining devices, software, connectivity, data hosting, cybersecurity, implementation support, technical assistance, and interoperability services from outside companies.

The RPM and RTM proposed policies that were published in the Proposed Rule drew hundreds of comments, many of which opposed the proposed direct employment requirement and indicated that this change would make it more difficult to provide remote patient monitoring services. CMS is delaying implementation of the direct employment requirement for two years (until 2029) in order to allow time for practices to hire and train staff for RPM and RTM, and indicated that it will provide sub-regulatory guidance to clarify standards for appropriate clinical staff arrangements.

CMS proposed these policies in the Medicare Physician Fee Schedule 2027 Proposed Rule, which was published in July 2026 [see here] with a proposed 2027 effective date. CMS finalized these changes but delayed the effective date for the direct employment requirement for two years.

In both the proposed and final rules CMS cited compliance concerns raised by the HHS Office of Inspector General (OIG) about RPM in 2024 and 2025 reports [see here]. CMS continues to express particular concern that outsourcing may result in fragmented care and insufficient billing practitioner involvement and oversight. CMS states in the Final Rule commentary that:

“We do not believe that RPM or RTM services provided by clinical staff contracted by a third party can ensure the billing practitioner has adequate oversight, management, or collaboration to bill RPM or RTM services. If there is little oversight by the billing practitioner or a lack of clinical integration between a third-party providing  RPM/RTM and the billing practitioner, we do not believe that the full scope of service elements required to bill these codes are being met.”

CMS continues to emphasize that all of the existing “incident to” and other rules for billing RPM and RTM services must be satisfied, and warned that in its view RPM and RTM billing criteria are not met if there is little oversight by the billing practitioner or a lack of clinical integration between a third party service provider and the billing practitioner, in which case the practitioner should not bill for remote patient monitoring services. CMS noted that the billing practitioner must retain sufficient involvement in remote patient monitoring services and that the billing codes for clinical staff time are valued to include ongoing work and supervision by the billing practitioner that may not be delegated to others.

While the delayed effective date for the direct employment requirement may be welcome news for those involved in outsourced staffing, it is important to update workflows to reflect current standards and review RPM and RTM arrangements to ensure that all billing requirements are satisfied and documented and that appropriate compliance safeguards are in place. The continued commentary from CMS and its determination to finalize the direct employment requirement (even though delayed) suggest that outsourced arrangements may be subject to increasing scrutiny, and that clinical integration and billing practitioner management and oversight of clinical staff involved in remote patient monitoring (whether outsourced or internal to the practice) are particularly important.