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In a game changing move, the Centers for Medicare and Medicaid Services (CMS) recently proposed a rule that would allow for Medicare reimbursement of digital therapeutics. This decision has the potential to revolutionize the way healthcare is delivered and will significantly impact both healthcare costs and patient access and outcomes.
Digital therapeutics are software-based medical treatments that are cleared by the FDA to prevent, manage, or treat a medical or behavioral condition. They have the potential to transform the way medicine is practiced, shifting the focus from intermittent, in-person care to continuous, therapeutic intervention and remote monitoring.
Under the proposed rule, clinicians would be able to prescribe mental and behavioral health digital therapeutic products to their patients and seek reimbursement from Medicare for both device supply and for their time interpreting collected data and managing the patient experience. New specific codes have been proposed to facilitate this reimbursement.
We sat down with RealizedCare CEO and Digital Therapeutics Alliance Board Chair Aaron Gani to discuss the changes:
Q: What are the implications of this proposal in terms of both cost and quality for seniors on Medicare?
The implications of this proposal are far-reaching. On the cost front, digital therapeutics have the potential to reduce overall healthcare spending. A meta-analysis of studies found that digital therapeutics were cost-effective in two-thirds of cases and led to cost savings in most of the others. By providing reimbursement for these cost-effective treatments, Medicare can help bend the care cost curve.
But the impact goes beyond just savings. Digital therapeutics also have the potential to drastically improve access to care and health outcomes. By enabling continuous monitoring and personalized intervention, these tools can help patients better manage their conditions and improve their quality of life. Research has shown that digital solutions for disease management can drive better outcomes for patients living with chronic conditions.
This CMS proposal is a recognition of the growing body of evidence supporting the safety, efficacy, and value of digital therapeutics. It is a really exciting step towards creating a healthcare system that is more patient-centered, accessible, and effective.
Q: What's the role of clinicians in this model and how are they reimbursed?
Clinicians play a pivotal role in healthcare delivery, as they are both the most trusted by patients and the most dedicated to improving patient health. And the proposed reimbursement framework does well in recognizing this role.
The codes proposed do two things. First, they reimburse providers for device costs and patient education and onboarding (GMBT1). Then the providers also get compensated for the time they spend interacting with the DTx platform, reviewing patient engagement data and outcomes, and electronically guiding patients and adjusting care plans
This approach ensures the provider is still the quarterback of the team, while enabling digital therapeutics to become a force multiplier and care extender. It addresses the overwhelming workload of clinicians, particularly in mental and behavioral health, by streamlining workflows and reimbursing them for their time. Ultimately, this framework will help more patients receive needed care efficiently.
Q: What challenges or barriers still stand in the way of widespread adoption of digital therapeutics?
Frankly, pricing for the DTx devices remains uncertain. And while the proposed rule is a major step forward, there is still more work to be done. We’ll be looking for further guidance to clarify the specifics of reimbursement, including what types of digital therapeutics will be covered and under what circumstances.
But I’m energized by this proposal. It represents a major milestone in the journey towards a more digital, more patient-centered healthcare system. It is a recognition that the future of medicine is not only in a doctor's office or a hospital, but also in the patient's own home. And it is a testament to the power of technology to transform the way we prevent, treat, and manage disease.
