CMS proposal to end third-party RPM puts vendors on their heels

Earlier this summer, a proposed rule from CMS hinted at an end to vendor-run remote patient monitoring. The agency cited a propensity for fragmented care and lack of oversight amid a 31 percent annual increase in Medicare reimbursement for RPM.  

Many health systems are in a bind, having outsourced RPM because they lack the staff to monitor patients continuously. These organizations – primarily smaller practices and systems in rural and underserved areas – face the difficult choice to attempt to staff programs themselves or drop programs entirely if the rule is finalized as it is. 

RPM and remote therapeutic monitoring (RTM) vendors are similarly concerned, as the proposed rule directly threatens their business models and go-to-market strategies. The rule also creates a “sharp dichotomy,” the American Telemedicine Association’s ATA Action said in a statement, since CMS seeks to scale back remote monitoring as Congress simultaneously advocates for expanded access to care.  

Put another way: Vendors likely have months of uncertainty, contingency planning, and advocacy ahead of them. 

A matter of patient supervision

CMS aims to limit how providers administer and get paid for remote monitoring, proposing that payment be allowed only when clinical staff are direct employees of the physician practice or billing practitioner. Staff don’t need to be physically located within the facility, but they do need to be on the payroll.  

As Nixon Law Group pointed out, this would essentially reverse a policy in place since 2020, when practices told CMS direct supervision of patients made RPM administration “impractical.” That feedback, coupled with care and staffing demands during the public health emergency, motivated the agency to allow general supervision of patients by third-party providers.  

CMS cited several reasons for the reversal in its proposed rule, Duane Morris noted. Namely, third-party RPM and RTM can contribute to fragmented care workflows, insufficient oversight, and inadequate program management. It didn’t help that 43 percent of Medicare beneficiaries enrolled in RPM failed to receive a single required component of the service. That’s an indication that many programs lacked proper channels for coordination and follow-up. 

Additionally, the agency seeks to limit RPM and RTM to established patients who have had separate, face-to-face initiating visits. (This provision currently applies to RPM only.) As Clark Hill explained, this aligns with “CMS’s continuing emphasis that remote monitoring should remain integrated into the physician’s overall management of the patient’s care rather than function as a stand-alone reimbursable service.” 

Related article: CMS proposed rule would end vendor-run remote monitoring. Here’s what breaks for health systems. 

Strong implications for RPM vendors

It’s worth noting RPM and RTM companies wouldn’t be fully shut out. Nixon Law Group noted providers could still purchase “technology, devices, software, analytics, or administrative services.” Outsourced clinical staffing would still be OK for chronic care management services, too. 

The restrictions specifically apply to clinical staffing services for RPM. As such, it would significantly change the vendor’s role in remote monitoring, Clark Hill suggested, “and how physician practices structure those relationships going forward.” Vendors that offer a combination of technology, staff, and full-service monitoring would be wise to reassess their contracting and staffing models, DLA Piper added. 

The broader implication is reassessment of go-to-market strategy. While the proposal would require provider organizations to bring clinical monitoring services in-house, there’s still a role to play for technology platforms, data-integration partners, and implementation experts, Quandary Consulting Group said.  

To that end, RPM and RTM vendors should strive to “clearly separate their services from activities that must be performed by employees of the billing practice,” the consultancy added. Accomplishing that means addressing key questions – chief among them which employees are classified as clinical staff and use their time to support Medicare claims that, under the proposed rule, health systems are now responsible for supporting. Vendors will need to reassign these responsibilities with minimal disruption to patient care. 

3 actions for RPM vendors to take today

Experts offered three clear calls to action for RPM and RTM vendors in the months ahead. 

• Comment. The public comment period on the proposed rule closes Sept. 14. McDermott+ suggested that stakeholders address specific disruptions to care and ambiguities in the proposed rule, especially in light of existing legislation aiming to expand remote monitoring programs in rural areas – a key area of focus for the Trump administration.  
• Send data to CMS. In the proposed rule, the agency admitted it “lacks detailed information about the costs and operational realities of RPM and RTM services,” Wilson Sonsini Goodrich & Rosati noted. Vendors “with data on pricing, staffing models, workflows, or access impacts therefore have a meaningful opportunity to shape the final rule.” 
• Rethink operating models. As the proposed rule doesn’t apply to commercially insured populations, vendors should consider whether their workflows can be applied to non-Medicare beneficiaries, Quandary said. Also, the ability to transition health systems from outsourced to in-house RPM “with limited interruption to the care their patients receive” will be a differentiating factor for vendors, Prevounce CEO Daniel Tashnek said – even (perhaps especially) if the proposed rule is pared back. 

Brian Eastwood is a Boston-based writer with more than 10 years of experience covering healthcare IT and healthcare delivery. He also writes about enterprise IT, consumer technology, and corporate leadership.