Medicare would stop paying for remote monitoring programs delivered by outside contractors starting Jan. 1, 2027. The Centers for Medicare & Medicaid Services issued a proposed rule on July 14 that would restrict payments for remote physiologic monitoring and remote therapeutic monitoring to services performed by clinical staff employed by the billing practice. The agency’s fact sheet outlines the shift as a strict requirement for employment, effectively blocking third-party vendors from handling these tasks for reimbursement.
Stricter rules for data reporting
Practices reporting these services would face two new guardrails. They must furnish a separately reportable initiating visit tied to the start of monitoring, and RTM services could only be billed for established patients. CMS also proposes lowering the values of the existing codes, arguing that the devices are available at a lower cost than the agency originally assumed.
The agency is considering a larger rewrite that could bundle RPM and RTM CPT codes. CMS raised this possibility in a comment solicitation, suggesting it might create four new HCPCS G codes. This approach aims to address recommendations from recent HHS Office of Inspector General reports that the current coding structure cannot fully resolve.
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Separately, the agency is adding five codes to the Medicare telehealth list and introducing two new modifiers. It also created a new payment category called Software as a Medical Service. This covers algorithm-based clinical decision support with diagnostic functionality. CMS issued a request for information on duplicate laboratory testing and imaging, noting that results are often siloed inside electronic health records, leaving physicians unaware the tests exist and ordering them again.
AI and prior authorization changes
Clinicians reporting under the Merit-based Incentive Payment System will see the most concrete technology proposals in the Quality Payment Program section. CMS proposes six new improvement activities for the 2027 performance period, including one specifically for “Clinician Use of Artificial Intelligence to Improve Patient Care.”
To earn credit, a practice must maintain written policies governing how AI tools are evaluated and monitored. These policies must focus on fairness, validity, and effectiveness. Alternatively, practices can participate in initiatives that build and pilot AI-enabled tools. CMS lists qualifying examples plainly, including risk-stratification models, AI-supported clinical decision support, summarizing medical literature, and generating notes for clinician review.
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The Promoting Interoperability category is being rebuilt around prior authorization. The Electronic Prior Authorization measure, previously finalized for 2027, would become optional and bonus-eligible that year. It would become required for 2028. For 2027, attesting would require using certified health IT modules built on the Fast Healthcare Interoperability Resources standard to complete at least one prior authorization request.
By 2028, certified EHR technology must include modules certified to all three electronic prior authorization criteria. CMS also proposes a new measure for Electronic Prior Authorization for Prescription Drugs, which would be required starting with the 2028 performance period. This gives practices a budget cycle to verify if their vendor is ready. CMS proposes dropping the direct review and surveillance attestations tied to the Office of the National Coordinator beginning with the 2026 performance period, as well as the Security Risk Analysis measure starting in 2027. However, dropping the measure does not remove the HIPAA Security Rule obligation.
A changing reporting setting
The proposed rule signals a significant structural shift for clinicians. CMS is proposing to sunset traditional MIPS after the 2028 performance period. Beginning in 2029, MIPS Value Pathways would become the only reporting option for eligible clinicians outside an alternative payment model. The agency proposes three new MVPs for 2027, covering diabetic disease, hypertension, and hospitalist care, bringing the total to 30 pathways. The performance threshold would remain at 75 points through the 2028 performance period.
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For practices already running a monitoring program, the immediate work is contractual, not clinical. Owners need to look at who is actually reviewing the data and billing the treatment management time each month. If that person works for a monitoring company rather than the practice, the revenue behind the program does not survive the proposal as written. Everyone else has a shorter list: confirm the EHR vendor’s timeline for FHIR-enabled prior authorization modules and decide whether the AI tools already in the building can be documented well enough to earn credit.
Comments on the proposed rule are due Sept. 14, 2026, referencing file code CMS-1848-P. Most provisions would take effect Jan. 1, 2027.
