Medicare proposes ban on vendors providing remote patient monitoring services

Medicare regulators have proposed a major policy change to ban vendors from providing remote patient monitoring services for doctors, citing concerns over low-value care, fraud, and wasteful spending. Payments for these services, covered since 2018, exceeded $500 million in 2024. The move is part of a broader effort by CMS to create a consistent payment structure for clinical software and AI by 2027.

Remote patient monitoring vendor ban

• ▪The proposed rule is part of the Trump administration's effort to reduce fraud and wasteful spending in the Medicare program
• ▪The proposed ban is described as a major policy change for the rapidly growing remote patient monitoring care model
• ▪Medicare has covered remote patient monitoring since 2018, with payments for these services reaching over $500 million in 2024
• ▪The proposal follows concerns from the health department's watchdog, academics, and insurers about payments for low-value services
• ▪Medicare regulators proposed on July 14, 2026, to ban vendors from providing remote patient monitoring services on behalf of doctors

Medicare software payment challenges

• ▪The Centers for Medicare and Medicaid Services' payment system is designed for physical items, making it difficult to value software like a cardiac risk prediction algorithm
• ▪Medicare has historically struggled with how to pay for artificial intelligence and other software-based clinical tools

2027 proposed payment structure changes

• ▪In July 2026, the Centers for Medicare and Medicaid Services proposed rules for 2027 to create a more consistent payment structure for clinical software and AI
• ▪The proposed rules for 2027 cover hospital outpatient payments and physician fees
• ▪The proposed 2027 payment structure for clinical software and AI will consider the tools' impact on patient outcomes
• ▪The Centers for Medicare and Medicaid Services recently launched an alternative payment model for digital health services