Prescription Digital Therapeutics: Reimbursement Picture Comes into Focus

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Makers of FDA-grade software platforms emerging to treat mental health conditions in recent years have been pulling at whatever reimbursement threads they can to support commercial rollouts. But several recent policy developments may help the sector streamline their paths to payment and crack into the Medicare market.

Clinical-grade digital therapeutics have gained a higher profile during the pandemic, particularly to support mental health care, but they remain an awkward fit within the established reimbursement system. 

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The tools, FDA-authorized evidence-based software platforms to treat conditions including substance abuse disorder, ADHD, and depression (as well as supporting treatment of other chronic diseases like asthma and diabetes), can’t be covered by Medicare because they don’t fit in a legal benefit category. There are other options among private and Medicaid insurers, but there are no clear-cut paths to payment, no matter the payor. That could be changing, though, with several recent developments from key policymakers. 

First, last fall, the American Medical Association CPT Editorial Panel established a new Current Procedural Terminology (CPT) code, taking effect next January, for remote monitoring of cognitive behavioral therapy, allowing physicians to bill for the time they take to support patients who are leveraging these digital tools.

Then, several weeks ago, CMS established the first Level II Healthcare Common Procedure Coding System (HCPCS) code for prescription digital behavioral therapy. The code, which kicks in April 1, will make it easier for providers to bill private insurers for prescribing the emerging software systems in the first place. The HCPCS decision is also a significant symbolic win, companies say, because it demonstrates CMS’ recognition that prescription digital therapeutics are an important option for patient care, a key step toward eventually building out Medicare coverage in the space.

An important missing piece, though, is establishing a statutory benefit category for prescription digital therapeutics. On March 10, bipartisan legislation was introduced in both the US House and Senate to fill that gap. The Access to Prescription Digital Therapeutics Act would give CMS a path to reimburse for the technology and sets out instructions for a payment methodology.

According to Andy Molnar, CEO of the Digital Therapeutics Alliance (DTA), the recent progress reflects several years of intensive discussions with CMS and other policymakers about what prescription digital therapeutics are and why they need to be distinguished in the reimbursement system.


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