New Study: RPM Reimbursement Needs a Reset

CMS spent almost $200 million on remote patient monitoring in 2023, and more providers are embracing the technology to track patient biometrics. That’s why the time is right to align payer policies and reimbursement on high-performing programs.

Healthcare providers are finding increasing value in remote patient monitoring (RPM), and that ROI is tied to Medicare and Medicaid reimbursement. But those payments are limited, and some providers are saying they don’t get enough back to justify the investment in new technology and workflows.

With that in mind, a new report says the time is right to rewrite RPM policy, improving reimbursements and giving providers more opportunities to embrace innovative tools that can improve clinical outcomes.

The report, from the Peterson Center on Healthcare, finds that Medicare expenditures on RPM have grown from $6.8 million in 2019 to $194.5 million in 2023, but that’s still just a small part of overall Medicare spending. The growth is driven by CPT codes approved by the Centers for Medicare & Medicaid Services (CMS) for some remote physiological monitoring (RPM) and remote therapeutic monitoring (RTM) services, as well as a growing number of vendors offering RPM devices and management services and a general desire among clinicians and care teams to track their patients’ biometrics outside of the doctor’s office, hospital or clinic.

CMS reimbursement began in 2019 and was expanded in 2023,and as of September 2024, 42 states now have some form of reimbursement through Medicaid for certain RPM services. But the report notes those rules are limited and commercial payer adoption is inconsistent.

That’s why, the report says, policy-makers, providers and payers should come together to improve reimbursement opportunities. The report lists three recommendations:

• Align coverage and reimbursement for RPM services to clinical value.
• Ensure access to high-impact RPM services.
• Improve data collection in RPM tools and programs.

“As we adopt exciting, new technologies that extend care beyond the walls of the doctor’s office, we need to design payment models that align with clinical benefits for patients,” Caroline Pearson, executive director of the Peterson Center on Healthcare, said in a press release. “That means ending ‘forever codes’ that incentivize long-term billing of ineffective care and instead designing payments that reimburse providers for the periods of time they should be actively monitoring and managing their patients’ diseases.”

A Service Ripe for Expansion and Improvement

The report lists four takeaways from a review of CMS data:

• Only about 1% of Medicare patients are in remote physiological monitoring programs, and even less are using remote therapeutic monitoring. But those numbers are growing, from 44,500 in 2019 to 451,000 in 2023 for RPM and roughly 52,500 in 2023 for RTM.
• Providers are billing RPM services for longer periods of time, from an average of 1.7 months in 2019 to 5.2 months in 2023.
• More than half (57%) of all Medicare spending on remote physiological monitoring services focuses on hypertension, while 13% addresses diabetes and 6% targets sleep and waking disorders. For remote therapeutic monitoring, almost 60% targets musculoskeletal disorders, while 5% addresses either respiratory disorders or hypertension.
• In 2023, traditional Medicare spent $194.5 million on remote physiological monitoring services and another $10.4 million on remote therapeutic monitoring services, which comes out to an increase per-patient from $154 in 2019 to $431 in 2023.

The report suggests that RPM reimbursement be tied to those specific programs that show the most value.

“Coverage and payment policies should be aligned with this evidence to encourage adoption of solutions that deliver clinical benefits and limit payment for monitoring that is not driving meaningful clinical improvements,” the report states.

Why Are Doctors Embracing RPM?

The report also revealed three key takeaways to clinical value for RPM programs:

• The clinical impact of RPM varies by condition.
• Clinical benefits from RPM depend on provider engagement with the data collected and the ability to act on that data to improve outcomes.
• RPM programs are time-limited, and clinical effectiveness varies depending on the condition.

“These clinical findings suggest that reimbursement for remote monitoring solutions should reflect effectiveness and vary by duration,” the report said. “CMS and other payers should consider developing condition-specific billing guidelines that match the periods of highest effectiveness as evidenced by clinical benefit for each condition.”

“Once an evidence-based time limit for remote monitoring services is reached, continued coverage of these services should require additional clinical justification,” the report continues. “Medical necessity is already a standard in Medicare and Medicaid; this would be a step toward defining medical necessity criteria for remote monitoring technologies.”

As an aside, the report notes that providers currently have no limits on how long they can use RPM for a specific patient, and can be reimbursed “on a monthly basis in perpetuity for anyone with a diagnosed chronic condition, even if they are already well-managed.”

This points to the need for more detailed data on how providers are billing for RPM services and how these variations in the duration and effectiveness of treatment may impact healthcare spending.

The report also gives health system and hospital leaders a blueprint for developing an RPM strategy that makes the most out of available reimbursements. It can also be used to develop more effective programs, either by fine-tuning devices and care pathways for common conditions are creating new treatments to address gaps in clinical care.