The Proposed 2027 Fee Schedule Takes Direct Aim at the RPM Business Model
By: N. Adam Brown, MD, MBA
Initial discussion surrounding the proposed 2027 Physician Fee Schedule has largely centered on physician reimbursement and digital health business models. A deserved focus, and yet one affected group remains just offstage: clinical staffing firms supplying nursing and allied health professionals. The Centers for Medicaid and Medicare Services (CMS) proposal would only pay for remote patient monitoring (RPM) when services are furnished by clinical staff, meaning they are directly employed by the billing practice. That means a sizable chunk of contracted nursing labor will no longer be able to support Medicare‑billable RPM work.
Staffing leaders now have a distinct set of questions to answer about how their offerings, contracts, and workforce mix will need to change if this policy is finalized.
Most RPM today follows a simple pattern:
A physician practice hires an RPM vendor, which supplies devices, runs the software, and employs the nurses and medical assistants who review data, call patients, escalate issues, and document time for billing.
The practice will then submit RPM claims to Medicare under the physician’s supervision, and the vendor is paid a per‑patient monthly fee or a share of collections.
The model depends on a longstanding Medicare rule that allows clinical staff time to be counted toward the practice’s claim even when those staff are not on the practice’s payroll. By pooling monitoring staff across many practices, vendors can make the economics work for both themselves and their clients.
CMS proposes that payment for RPM and RTM only be allowed when the services are performed by clinical staff employed by the practice, explicitly excluding contractors. Practitioners would then have to furnish a separately reportable initiating visit when monitoring begins, and RTM would be limited to established patients. Furthermore, CMS wants to revalue the codes downward under the reasoning that the devices cost less than the agency originally assumed. It is also seeking comment on collapsing all 17 remote monitoring codes into four bundled G codes, citing program integrity concerns raised by the Office of Inspector General.
The impending revenue hit will be substantial and compounding. Remote monitoring drew roughly $536 million in Medicare payments in 2024 and the device supply codes will get revalued down, while the conversion factor drops roughly 1.7 percent for most clinicians through the expiration of a temporary congressional pay bump. If the bundling proposal advances in future rulemaking, 17 billable line items will become four.
Bundling in Medicare almost never means more money. Then layer on the funnel effects of initiating visit requirements and established patient rules for RTM, which will eliminate outreach-driven growth entirely. A vendor whose model assumes a certain revenue per patient per month, and a certain enrollment velocity, will be forced to adopt a new model, and fast.
But the revenue problem pales in comparison to the operational problem. The employment requirement does not lower the price of the vendor’s core product. Rather, it makes the core product unbillable. A monitoring company whose value proposition is to provide the clinical labor so their client does not have to has nothing left to sell to a Medicare-dependent practice if that labor no longer counts. Meanwhile, the fallback position of becoming a pure software and device supplier represents a fraction of the revenue and puts these entities into a market that is crowded with competitors. This change will occur at the same time the vendor is carrying a clinical workforce, monitoring centers, and enrollment teams built for a model that would no longer exist.
Practices will face the mirror image of that problem: to keep an RPM program, it will have to bring the monitoring labor in house. That means recruiting nurses in a market where every hospital in the United States is already competing for them (staffing firms themselves rate recruiting difficulty at 3.3 out of 5 in some surveys), then absorbing the fixed cost of employees whose workload only pencils out if the practice has enough monitored patients to keep them busy. For most practices, the RPM panel is too small and too variable to support a dedicated monitoring team on their own. Vendors have made the model workable by pooling clinical staff across many practices and spreading monitoring work over a larger, more stable volume. The proposed rule outlaws that pooling.
Large health systems could absorb this shift. Small and rural practices, the ones CMS says it wants to support, mostly could not. Rural hospitals ran a 3.1 percent median operating margin in 2023, and two-thirds of the country’s primary-care shortage areas are rural. Their likely response is not hiring, but rather shutting the program down. The patients lose the monitoring, to devastating effect: in one Medicare cohort, remote blood-pressure management cut the share of patients in stage 2 hypertension from 100 percent to 25 percent over 12 months. It is a strange outcome for an administration that just launched a 10-year Innovation Center model premised on technology-enabled chronic care.
So what should operators do between now and the final rule in November?
First, remember at this stage this schedule is a mere proposal, so comment, and, where possible, provide data. The definitional fight over the word “employed” will be one of the most consequential of this rulemaking cycle. Does a leased employee count? A staffing arrangement where the practice directs the work but a third party runs payroll? CMS has softened maximalist proposals before when the record showed real access harm. Outcomes data, staffing economics, and patient access projections belong in that record, submitted under docket CMS-1848-P before the mid-September deadline.
Second, scenario-plan the business now, not in November. Model a world where the employment rule is finalized as written. Consider a world where it softens to permit leased or supervised arrangements, and a world where it is delayed a year. Know which contracts, which headcount, and which markets you keep in each. The companies that have a plan rather than a hope will be the ones that can still raise money in the fourth quarter.
Third, look hard at the pivots that survive every scenario:Technology licensing to practices that insource; employer-of-record and workforce conversion services that help practices stand up compliant internal teams, potentially in partnership with the staffing industry rather than in competition with it; value-based contracts, including the ACCESS Model, where the fee schedule’s employment rules do not apply; and commercial and Medicare Advantage business, which this rule does not touch.
I spent years running a wing of a national clinical services business, and I learned that regulatory risk does not kill companies. But pretending the risk is not real most certainly does. This proposal may well soften, but the direction the agency is traveling is unmistakable: CMS wants remote monitoring anchored inside the treating practice, with fewer intermediaries between the patient and the physician. Every RPM business plan written before July 14 should be reopened this week.
Adam Brown, MD, MBA is a physician, healthcare executive, and business professor. He is the founder and managing partner of ABIG Health, a Washington, D.C.-based healthcare strategy firm.
