CMS’s proposed Medicare payment rules for 2027 signal continued scrutiny of how emerging technologies are integrated into patient care and are reimbursed. Among the proposals are new restrictions on the use of third-party vendors for Remote Patient Monitoring (RPM) and Remote Therapeutic Monitoring (RTM), as well as a new payment framework for software-based, AI, and algorithm-driven medical services.
CMS Proposes Restrictions on Third-Party RPM and RTM Services
The Centers for Medicare & Medicaid Services (CMS) is proposing a significant change to Medicare payment for Remote Patient Monitoring (RPM) and Remote Therapeutic Monitoring (RTM) services as part of the 2027 Physician Fee Schedule. Under a new proposed rule, CMS would no longer pay for RPM or RTM services furnished by clinical staff employed by third-party vendors. Instead, clinical staff furnishing these services must be directly employed by the billing practitioner or the practitioner’s practice. CMS cited concerns regarding insufficient practitioner oversight, management, and collaboration when remote monitoring services are outsourced to third parties.
The revised policy does not require clinical staff to be physically located at the practice or require beneficiaries to be on-site when monitoring services are furnished. CMS, however, would require RTM services to be furnished only to established patients, and practitioners billing for RPM or RTM services must provide a separately reportable initiating visit.
If finalized, these changes could significantly affect providers that rely on third-party vendors to furnish RPM or RTM services. Practices should review their current remote monitoring arrangements, including staffing and vendor relationships, and consider whether changes may be necessary to comply with the new requirements, if implemented. Providers should continue to monitor the rulemaking process as CMS considers comments and works toward issuance of the final 2027 Physician Fee Schedule.
You can read the full proposed rule here.
CMS Proposes New Payment Framework for Software as a Medical Service
As part of the 2027 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) proposed rule, CMS is seeking to standardize Medicare reimbursement for AI- and algorithm-driven diagnostic technologies.
CMS proposes replacing the term Software as a Service (SaaS) with Software as a Medical Service (SaMS) for software-based services that support clinical decision-making through algorithmic analysis. CMS would classify 36 Healthcare Common Procedure Coding System (HCPCS) codes as SaMS, including, among others, AI-based retinal imaging analysis, CT-derived coronary fractional flow reserve, and quantitative brain MRI analysis. As an interim measure while CMS develops a longer-term payment methodology, 21 of these new SaMS HCPCS codes would be reassigned from clinical Ambulatory Payment Classifications (APCs) to New Technology APCs.
If finalized, these changes would establish a more uniform Medicare payment framework for AI- and algorithm-driven services and could significantly affect how providers are reimbursed for these technologies under the OPPS.
You can read the full proposed rule here.