The Quiet Casualty of the 2027 Fee Schedule: Clinical Staffing Firms
By: N. Adam Brown, MD, MBA
Everyone analyzing the proposed 2027 Physician Fee Schedule is focused on physicians and digital health companies. A reasonable instinct, but missing from the scope is a third group sitting directly in the blast radius: the clinical staffing industry. If the Centers for Medicare and Medicaid Services (CMS) finalizes its proposal to pay for remote patient monitoring (RPM) only when the work is performed by non-contractor clinical staff employed by the billing practice, an entire category of contracted nursing labor will be effectively barred from generating Medicare revenue.
For that reason alone, staffing executives should be reading this rule very closely and commenting on it.
Timing of this rule could hardly be worse for the market. U.S. healthcare staffing was a $39.4 billion market in 2025, up 63 percent from $24.2 billion in 2019 but well off its pandemic peak. The post-COVID correction has been brutal. Travel nursing, the largest segment at $14.2 billion, has contracted for three consecutive years as hospitals pushed back on bill rates; median EBITDA margins for travel-nurse firms have fallen to 4.8 percent, with the bottom quartile at near break-even. Per diem nursing sits at $4.5 billion and allied health at $9.8 billion, both flat to down. What’s more, only about two percent growth is projected for the sector in 2026. The one segment actually growing is locum tenens, now about $9.6 billion, but that is physician labor, not the nursing and medical-assistant time remote monitoring runs on.
In an industry digging out of a multi-year contraction, growth stories are precious, and virtually every market analysis of healthcare staffing published in the past two years names the same ones: telehealth, virtual care, and remote patient monitoring. Those categories let firms recruit nationally rather than locally, place clinicians in remote roles that nurses actually want, and ride a demand curve that was supposed to point up for a decade.
An U.S. Department of Health and Humans Services (HHS) Office of Inspector General (OIG) review found Medicare payments for remote physiologic monitoring grew roughly 20-fold between 2019 and 2022, from about $15 million to more than $300 million, with the number of monitored beneficiaries growing about 10-fold over the same period. By 2024, the figure had reached roughly $536 million for nearly one million beneficiaries. RPM growth continued as CMS added codes. And, in the 2026 final rule, lowered the billing thresholds. Behind every one of those billed management minutes is a nurse or medical assistant reviewing data and calling a patient, and a large share of that labor is contracted rather than employed. The work flows through RPM vendors who staff national monitoring centers, through virtual nursing arrangements, and through staffing firms placing remote clinicians with vendors and practices alike.
The shape of the exposure is clear: it is one of the few genuinely growing demand channels in a $39 billion industry that badly needs growing demand channels, and this rule proposes to switch it off.
The mechanics of the hit run through two doors. The first is direct. Staffing firms that supply nurses to RPM vendors will lose that book of business if the vendors’ Medicare revenue collapses because the vendors’ monitoring centers exist to generate billable time that would no longer be billable. The second is definitional, and it is the one that should worry the industry more. The proposed rule conditions payment on clinical staff being “employed by the practice.” If CMS interprets that to mean W-2 employment by the billing entity, then leased employees, agency placements, and employer-of-record arrangements are all disqualified, even when the nurse works exclusively for one practice, under that practice’s protocols, at that practice’s direction. It is a distinction about who runs payroll, who controls the clinical work, and it would set a precedent that reaches beyond remote monitoring.
Chronic care management, behavioral health integration, and advance care planning are all billed through nearly identical clinical staff arrangements, and this same rule shows CMS scrutinizing staff time in those services too. Specifically, it proposes to reserve the advance-care-planning codes for time the billing practitioner personally spends, splitting clinical-staff time into separate codes. A payroll-based definition of “employed,” once established, will not stay confined to RPM.
So what should staffing leaders do?
First, submit comments before the mid-September deadline, under docket CMS-1848-P. The single most valuable thing the staffing industry can contribute is a functional definition of employment. CMS is trying to solve a real problem, so the industry should propose language that addresses abuse while preserving legitimate arrangements – staff who work under the practice’s direct clinical control, follow the practice’s protocols, and are supervised by the billing practitioner, regardless of which entity issues the paycheck. Trade associations should coordinate, but individual firms should also file comments that offer specifics about the practices and patients they support. Rural access arguments will carry particular weight because small and rural practices are precisely the ones that cannot recruit monitoring nurses on their own. Two-thirds of the nation’s primary-care shortage areas are rural, and rural hospitals ran a 3.1 percent median operating margin in 2023. There is no slack in those budgets to build a new internal monitoring team.
Second, build a product that survives the rule. If practices must employ their monitoring staff, someone has to help them do it. That is recruitment, direct placement, temp-to-perm conversion, and workforce advisory for practices standing up internal monitoring teams for the first time. The firms that wait for the final rule will watch their vendor clients cancel contracts and have nothing to sell the practices those vendors leave behind.
Third and finally, diversify the remote care exposure beyond the fee schedule. Medicare Advantage plans, commercial payers, and hospital-at-home programs all use contracted virtual nursing without touching these billing rules. So does the new ACCESS Model, the Innovation Center’s 10-year technology-enabled chronic care program, which pays for outcomes rather than staff time and does not import the fee schedule’s employment restrictions. Remote clinical labor is not going away; it is simply a matter of which payment doors it flows through.
I ran clinical workforce operations at a national scale for years, so I will say plainly what the industry sometimes cannot: some contracted monitoring arrangements were built to maximize billing, not care. But the remedy on the table punishes the payroll structure instead of the misconduct. A nurse’s work is not less real because a staffing firm employs her. The industry has eight weeks to make that case.
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.
