Introduction
Centers for Medicare & Medicaid Services (CMS) finalized the 2025 Medicare Physician Fee Schedule (PFS), presenting a limited yet significant expansion in digital health policies. While CMS introduced new codes for digital mental health technologies, the agency expressed its constrained ability to fully support digital health payments due to regulatory limitations. In this final rule, it emphasized the need for additional congressional action to enhance digital health services under Medicare, especially regarding telehealth and digital therapeutics.
Overview of the 2025 Medicare Physician Fee Schedule
The 2025 Medicare Physician Fee Schedule (PFS) outlines reimbursement rates and coverage for various healthcare services, impacting both providers and Medicare beneficiaries. With healthcare’s increasing digital transformation, the PFS has become critical for determining how digital health solutions are supported in Medicare. CMS’s 2025 schedule provides some expansions for digital health, but the overall offering remains modest, reflecting CMS’s acknowledgment of its limited authority.
CMS’s Limited Authority in Digital Health Expansion
Despite demand for broader digital health coverage, CMS noted its limited authority to institute comprehensive digital health policies. Much of the agency’s final decisions for the 2025 PFS indicate a cautious approach, largely due to pending Congressional action on Medicare telehealth flexibilities and the categorization of digital therapeutics.
Telehealth Policy Constraints
With Medicare telehealth flexibilities set to expire on December 31, 2024, CMS has limited options for establishing lasting policies. Although Congress is expected to extend these flexibilities for another two years, it could not guarantee long-term solutions. The agency made audio-only telehealth services permanent but did not confirm other aspects, such as requirements for telehealth provider location or virtual supervision of medical residents, leaving telehealth providers and patients uncertain about future coverage.
Digital Therapeutics and Mental Health
Digital therapeutics (DTx) represent a promising field, particularly for mental health treatment. CMS introduced new codes for mental health digital therapeutics, providing initial support for devices used to treat conditions like anxiety, depression, substance use disorder, and insomnia. However, the agency stressed that further congressional authorization is essential to develop a new benefit category covering a wider range of digital health tools under Medicare.
New Codes for Digital Mental Health Technologies (DMHT)
CMS made strides by adding Digital Mental Health Technology (DMHT) codes to the 2025 PFS, paving the way for reimbursement of specific mental health treatment devices. This development provides clearer pathways for digital health companies targeting mental health conditions.
Reimbursement Codes and Payment Structures
Under the final rule, CMS introduced codes G0552-4:
G0552: A device supply code that allows reimbursement for digital mental health treatment devices provided by practitioners. However, CMS only reimburses practitioners who incur the device cost directly, excluding patient-supplied devices. Due to variable data from submitted invoices, CMS did not set a fixed reimbursement price for G0552.
G0553-4: These codes cover treatment management services in 20-minute increments, reimbursing practitioners approximately $21.67 for each session. The RVU for both codes was assigned as 0.67, with payment amounts adjusted by geography.
These codes establish a new baseline for reimbursement, although it indicated the need for continuous refinement based on further data.
Differentiating DMHT from Remote Therapeutic Monitoring
One key clarification in the final rule is the distinction between DMHT codes and existing Remote Therapeutic Monitoring (RTM) codes. CMS noted that while RTM devices are designed to treat and monitor patient response, DMHT devices are intended solely for treatment. To emphasize this difference, CMS revised definitions for DMHT codes, clarifying that providers review “information” rather than “data,” setting a more specific standard for DMHT usage.
It also confirmed that payments would not be reduced if mental health patients do not complete treatment, recognizing that mental health patients may experience periods of discontinuation in their care.
Looking Ahead: CMS’s Call for Congressional Action
CMS’sfinal rule reflects a starting point for digital health reimbursement within Medicare but underscores the limitations the agency faces without further congressional support. It explicitly called for a new benefit category for digital therapeutics, which would provide a more robust foundation for including these technologies within Medicare. This call for action emphasizes that while CMS has moved forward, broader policy expansion relies on legislative backing to address gaps in digital health coverage and payment standards.
Conclusion
The CMS final rule for the 2025 Medicare Physician Fee Schedule marks incremental progress in supporting digital health services, but significant challenges remain. Without congressional backing, CMS’s ability to implement lasting changes in telehealth and digital therapeutics is limited. This development signals a critical juncture for digital health advocates, providers, and policymakers to push for legislative support that ensures Medicare beneficiaries have access to modern, digital-enabled healthcare solutions.
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FAQs
Q1: What changes did CMS make in the 2025 PFS for digital health?
Ans: It introduced new codes for Digital Mental Health Technologies (DMHT), enabling reimbursement for mental health treatment devices. However, broader digital health policies remain limited due to regulatory constraints.
Q2: Why is CMS limited in expanding digital health policies?
Ans: CMS cited its restricted authority under current regulations, which limits its ability to implement comprehensive digital health policies. Congressional action is needed to expand Medicare coverage for telehealth and other digital therapeutics.
Q3: What are DMHT codes, and how do they differ from RTM?
Ans: DMHT codes cover digital mental health treatment devices that provide therapy rather than monitor. RTM codes, by contrast, include devices that track patient response to treatment.
Q4: Will Medicare telehealth flexibilities continue in 2025?
Ans: The current telehealth flexibilities expire on December 31, 2024. While Congress is expected to extend them, CMS cannot implement permanent policies until further legislative action.
Q5: How much will practitioners be reimbursed under the new DMHT codes?
Ans: For treatment management services under codes G0553-4, practitioners are reimbursed about $21.67 per 20-minute session, with payment adjustments based on geography.
