Proposed Medicare Rule Could End Remote Monitoring for Rural Patients as States Chase $50 Billion Overhaul

Dianne Williams says she lost weight and lowered her blood pressure thanks to a simple routine: quarterly doctor appointments, monthly phone calls with a nurse, and a home blood pressure cuff that sends readings to her care team. Williams lives in rural Georgia, and she credits these services, known as remote patient monitoring, with pushing her to take her medication and rethink her diet and exercise.

“It’s good to have somebody talk to you and tell you what your progress is like. And she’s a very nice person,” Williams said of her nurse.

Many Medicare patients, especially those in rural areas, soon may lose that kind of care at home. A proposed federal rule would halt Medicare reimbursements for providers who rely on health technology companies to run remote monitoring for their patients.

What the Proposed Rule Would Change

Under the proposal, Medicare would pay clinicians only when someone at the facility where they work provides the service. That change would effectively cut out the outside vendors that many practices use to deliver monitoring. The Centers for Medicare & Medicaid Services (CMS) wrote the rule in response to reports from the Department of Health and Human Services’ Office of Inspector General, an independent federal oversight agency.

The 2024 and 2025 reports raised concerns about fraud, a lack of data collection, and patients who did not receive treatment from the clinician who prescribed the device. The proposed rule adds that outside vendors may “have little to no established relationship” with patients and their clinicians. It says that distance can “fragment care.”

Health policy experts warn that the cure may prove worse than the problem. Caroline Pearson, executive director of the nonprofit Peterson Center on Healthcare, said the change would sharply limit access.

“The rule would virtually eliminate the use of remote monitoring services, or dramatically reduce the use,” for many Medicare patients, said Pearson.

Why Rural Communities Stand to Lose the Most

Pearson, whose organization focuses on healthcare affordability, expects rural patients to absorb the heaviest blow.

“I think the rural communities will be some of the hardest hit,” said Pearson.

She explained that remote monitoring programs help most where patients struggle to reach in-person appointments. Most rural healthcare facilities that offer these programs hire third-party vendors, she said, because they lack the capacity to launch and oversee their own. Under the proposed rule, those facilities would lose the model they currently use.

CMS spokesperson Timothy Foster said the agency does not dismiss the value of the technology. He argued that the government still needs additional safeguards.

Foster said the agency “recognizes the important role that technology-enabled care can play in improving access to care, including in rural communities.”

A $50 Billion Rural Health Bet Takes Shape

The debate arrives as rural health care sits at what analysts describe as an inflection point. The Rural Health Transformation Program (RHTP), enacted as part of H.R. 1, commits $50 billion over five years to help states improve access, quality, and outcomes in rural care delivery. That investment lands alongside an estimated $137 billion in federal Medicaid cuts to rural communities over the next decade, a gap that RHTP funding alone cannot close.

State plans reflect the long list of challenges rural communities face, including provider shortages, aging infrastructure, hospital closures, and limited access to health technologies. All 50 states propose initiatives in technology innovation and workforce development, the two most common investments.

How the Money Flows to States

CMS is distributing $10 billion annually for five years. Year-one state awards range from $147 million for New Jersey to $281 million for Texas. CMS splits the money in two: it divides half equally among all approved states and allocates the other half through a point-scoring methodology that weighs each state’s rural health factors and proposed initiatives.

Because the formula ties funding only minimally to rural population size, the amount per rural resident varies widely. It runs from less than $150 to more than $600, with an average of $157 per rural resident.

Federal Oversight and State Capacity

The new Office of Rural Health Transformation at CMS oversees how states carry out these investments. CMS administers the program through cooperative agreements, which require ongoing communication between states and the federal government and give the agency significant control over how states use the money. Between January and May, CMS worked with states to finalize budgets, and many had to rework their proposals to match program requirements.

The program also carries clawback authority. CMS can recover RHTP funds if states fail to use them consistently with their approved applications.

Running a program of this scale demands significant staff capacity at the state level. Some states and health systems have created new RHTP offices by pulling experts from existing rural health programs, while others have hired new staff.

Competing Signals for Rural Care

Together, the two federal efforts send competing signals to rural communities. One invests billions to expand technology and strengthen the rural workforce, while the other could remove a technology-enabled service that patients like Williams already use. CMS says it wants to protect patients and curb the problems the inspector general flagged.

Pearson and other advocates counter that the proposal could strip away a tool that helps people manage chronic conditions without a long drive to a clinic. For Williams, the stakes are personal: the monthly calls and the cuff on her arm helped her lose weight and lower her blood pressure. Whether patients like her keep that support now depends on how CMS finalizes its rule.