ASP Insight · Telehealth & Remote Monitoring · CY 2027 PFS Proposed Rule

The answer first: In the CY 2027 Physician Fee Schedule proposed rule (CMS-1848-P), CMS proposes that remote physiologic monitoring (RPM) and remote therapeutic monitoring (RTM) management services be payable only when furnished by clinical staff who are direct employees of the billing practitioner or practice, and only after a separately reportable face-to-face initiating visit. If finalized, the policy takes effect January 1, 2027. Practices that run monitoring through third-party vendors would lose Medicare payment for those code lines entirely.

CMS-1848-PProposed rule

Jul 14, 2026CMS fact sheet

Jul 16, 2026Federal Register

Sep 14, 2026Comments due

Jan 1, 2027Effective if finalized

The rulemaking clock is already running

CMS released the fact sheet on July 14, 2026, the rule published in the Federal Register on July 16, 2026, and the comment window closes September 14, 2026. That leaves telehealth operators roughly one quarter to comment and roughly two quarters to restructure before the proposed effective date.

Jul 14, 2026CMS issues the CY 2027 PFS fact sheet for CMS-1848-P

Jul 16, 2026Proposed rule publishes in the Federal Register

Sep 14, 2026Public comments due to CMS

Jan 1, 2027Direct-employee requirement and initiating-visit requirement take effect if finalized

What actually changes

The proposal targets the management code families, CPT 99457 and 99458 for RPM and CPT 98980 and 98981 for RTM, where the billable minutes are performed by clinical staff under general supervision. Today, that staffing is routinely outsourced. Under CMS-1848-P, it could not be.

Current state, through CY 2026

Vendor staffing is billable

Third-party monitoring companies supply the clinical staff who review readings and log management minutes.
The billing practitioner bills under general supervision rules.
Monitoring can begin without a dedicated face-to-face initiating encounter in many program designs.

Proposed, effective Jan 1, 2027 if finalized

Direct employees only, plus an initiating visit

Management services are payable only when furnished by clinical staff who are direct employees of the billing practitioner or practice.
A face-to-face initiating visit is required and is separately reportable.
Vendor-furnished management minutes produce no Medicare payment on those code lines.

Will your RPM revenue survive January 1, 2027?

Decision point 1Who furnishes your RPM and RTM management minutes?

Payable in 2027

Clinical staff who are direct employees of the billing practitioner or practice perform the monitoring and management time. Payment continues, provided the initiating-visit requirement is also met.

Not payable

A third-party monitoring vendor's staff perform the minutes. Under the proposal, Medicare payment for those code lines ends, regardless of documentation quality or supervision arrangements.

Decision point 2How was monitoring initiated for each patient?

Compliant

A face-to-face initiating visit occurred and was reported as its own encounter. The monitoring episode has a defensible clinical anchor.

Exposure

Enrollment happened remotely or administratively with no qualifying face-to-face visit. Under the proposal, downstream management billing for that patient is not supportable.

Three restructuring paths before year-end

If your program depends on outsourced monitoring today, there are three realistic exits, and each takes a full quarter or more to execute properly.

Bring monitoring in-house

Hire or redeploy clinical staff as direct employees of the billing practice, size the panel per FTE, and rebuild workflows and time-capture inside your own walls before January 1, 2027.

Convert vendors to technology-only

Renegotiate vendor contracts so the vendor supplies devices, platform, and logistics while your employed staff furnish every billable minute. The contract language must make that division unambiguous.

Exit or re-scope the service line

Where staffing economics do not work, wind the program down deliberately, close open episodes cleanly, and reconcile the final claims rather than letting the line die in denials next year.

Cross-reference: OIG

This proposal does not land in a vacuum. The HHS Office of Inspector General added an Audit of Medicare Part B Remote Patient Monitoring Services to its Work Plan, announced December 2024 (oig.hhs.gov). Claims billed under the current outsourced model are already inside an open audit lens, so the historical look-back risk exists whether or not CMS-1848-P is finalized. Operators should treat 2025 and 2026 RPM claims as auditable today and document staffing arrangements, supervision, and time capture accordingly.

Operator to-do list

Inventory every RPM and RTM code line billed to Medicare and tag each one by who actually performs the management minutes, employed staff or vendor staff.
Pull every monitoring vendor contract and identify termination windows, renewal dates, and any auto-renewals that would lock you past January 1, 2027.
Model the staffing math for in-house monitoring, panel size per employed clinical FTE against current vendor fees, so the build-versus-exit decision is quantified, not assumed.
Map initiating visits for the current census. Identify enrolled patients with no qualifying face-to-face encounter and plan how they get one before 2027 episodes begin.
File a comment by September 14, 2026. CMS reads operator-specific impact data. If the direct-employee definition would break a clinically sound program, say so on the record with numbers.
Prepare for the OIG look-back. Assemble supervision documentation, time logs, and staffing rosters for 2025 and 2026 RPM claims now, while the records are easy to reach.
Set a December 2026 cutover date internally, ahead of the effective date, so January claims go out under the new model rather than into a denial queue.

Sources cited

CY 2027 Physician Fee Schedule proposed rule, CMS-1848-P, CMS fact sheet issued July 14, 2026 (cms.gov).
Federal Register publication of CMS-1848-P, July 16, 2026; public comments due September 14, 2026.
HHS Office of Inspector General Work Plan, Audit of Medicare Part B Remote Patient Monitoring Services, announced December 2024 (oig.hhs.gov).

Restructure the model before CMS restructures your revenue

ASP-RCM Solutions helps telehealth and remote monitoring programs run exactly this transition: code-line inventories, vendor contract exposure reviews, staffing and margin models for in-house monitoring, initiating-visit gap analysis, and audit-ready documentation packs for open OIG scrutiny. Our compliance-first billing workflows are built to keep coding accuracy at 95 percent or higher while the rules move underneath you. If any part of your RPM revenue depends on a vendor's staff today, the time to re-engineer it is this quarter, not next January.

Book an RPM 2027 readiness review