Effective Jan. 1, 2025, Medicare will pay for certain digital therapeutics (DTx) for mental health treatment. It’s a small but important step forward in addressing unmet needs by increasing access to technology products proven to improve outcomes in multiple clinical trials, and providing prescribing access to a broad group of health practitioners.
In a recent Xealth customer session, four experts unpacked what’s covered under these new billing codes, what it took to get them in the 2025 Medicare Physician Fee Schedule, and what it could mean for covering DTx for other conditions. Our speakers were:
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- Mike McSheery, Chief Executive Officer, Xealth
- Jenna Carl, Ph.D, Chief Medical Officer, Big Health
- Andy Molnar, CEO, Digital Therapeutics Alliance
- Catherine Pugh, Director of Digital Health, Consumer Technology Association
The 2025 fee schedule includes three Healthcare Common Procedure Coding System (HCPCS) supply codes (G0552, G0553, and G0554) for supplying DTx and providing initial education and onboarding. It applies to digital therapeutics cleared or approved by the FDA under 21 CFR 882.5801, computerized behavioral therapy for psychiatric disorders. Examples address insomnia, substance use disorder, depression, and anxiety.
Under the fee schedule, the billing practitioner must be a licensed health practitioner able to provide behavioral health services within their scope of practice. “That’s a broad group that would include psychologists, clinical social workers, family therapists, etc.,” Carl said. Primary care physicians count, too. “It does open up flexibility to provide these codes to a broad set of practitioners.”
Carl added the G codes differ from existing remote therapeutic monitoring codes. RTM codes come with extensive requirements for data feedback, while the G codes don’t.
There are some conditions. The DTx treatment needs to be FDA cleared, and only seven currently fit the bill. Also, the billing practitioner needs to diagnose the patient, provide ongoing treatment, and they will be reimbursed for the DTx treatment by the patient’s insurer. The billing practitioner can supervise non-qualifying practitioners in their practice to perform the associated services.
Advocates initially sought legislative action to create a new Medicare benefit category for prescription DTx, according to Pugh. Amid the usual roadblocks in getting a bill through Congress, they turned to exploring what the Centers for Medicare & Medicaid Services could do without the legislature. Legislation will still be needed to address other areas and use cases of digital therapeutics.
“CMS has the authority to cover new products as long as they fit within existing benefit categories,” she said. “So, if a provider orders a digital therapeutic like they would order a vaccination, they can now bill that incident to their professional services.”
Reimbursement is an important step forward. McSherry noted several Xealth customers are building use cases for mental and behavioral health DTx. All are limited in who they can offer services to. “If there’s a common synthesis between these customers, it’s that not one of these is being distributed to 100% of the patients with the clinical need. These programs just don’t have the reimbursement coverage that makes them widely available.”
At the same time, the G codes are only a step. Reimbursement rates have yet to be set for device supply payment (G0552). A Fierce Healthcare analysis of the 2025 fee schedule pointed out it’s hard for CMS to assign a price across the board for the DTx services currently covered. Plus, payments for treatment management services, or codes G0553 and G0554, are $40-50 for each 20-minute increment of billing.
Still, speakers were confident Medicare reimbursement for mental health DTx could pave the way for broader commercial insurance coverage – and could accelerate reimbursement models for conditions beyond mental health as well.
“The guardrails that are in place starting in 2025 are a way for manufacturers of these products and for providers to demonstrate how they work, how patients are engaging with them, to demonstrate real-world evidence, and start expanding these codes,” Molnar said. “That will get us a place where … other digital therapeutic categories can be standardized.”