The Centers for Medicare and Medicaid Services (CMS) proposed CPT payment codes for some digital therapeutics products for the first time, potentially paving a pathway toward widespread reimbursement for the nascent industry.
Digital therapeutics are software products physicians and patients can use to prevent, manage, or treat certain diseases and disorders. For example, digital therapeutics company Freespira created a virtual treatment that offers breathing exercises for patients who experience panic attacks and post-traumatic stress disorder symptoms.
CPT codes let providers bill for providing medical services and procedures. In 2022, CMS introduced a different type of code, called a Level II HCPCs code, for behavioral health digital therapeutics. Level II HCPCs codes mainly apply to Medicare and Medicaid, while CPT codes apply to all payers, so the CPT codes open digital therapeutics up to much more widespread coverage.
The codes were included in CMS’s 2025 Medicare Physician Fee Schedule (PFS) proposed rule, which was released on July 10 and applies only to digital therapeutics that support treatment for specific mental health conditions.
“CMS sets trends…[and] usually when they do something new, commercial plans follow suit,” Jessica Hauflaire, COO of the trade group Digital Therapeutics Alliance (DTA), told Healthcare Brew. “Following this, we expect that commercial plans will start to cover more [digital therapeutics]...employers will begin to demand these types of products and services as well, and that will influence health plans to adopt them.”
The three proposed codes—GMBT1, GMBT2, and GMBT3—would allow physicians to bill for digital therapeutics similarly to how they’d bill for administering a vaccine, Hauflaire said. GMBT1 would allow clinicians to bill for giving a digital therapeutic to patients and teaching them how to use it. GMBT2 covers the first 20 minutes of “monthly management services,” such as reviewing the data from the digital therapeutic device. GMBT3 covers each additional 20 minutes of monthly management services that are “directly related to the patient’s therapeutic use” of the device.
Hauflaire speculated that CMS chose to focus on mental health because it has been a “big priority” for federal agencies in recent years. “It’s also an opportunity for them to sort of pilot the whole industry,” she said, “so they can start with one type of product…before they scale more broadly to other conditions.”
The backdrop
For years, the digital therapeutics industry has pushed for more widespread payer coverage, Healthcare Brew has previously reported, arguing that their businesses aren’t sustainable without it, as it’s hard to create a consistent revenue stream without coverage.
Multiple industry-leading companies have faced challenges in recent years from a lack of payer coverage.
In April 2023, Pear Therapeutics, a pioneer of prescription digital therapeutics, filed for bankruptcy. In an announcement on LinkedIn, Corey McCann, the company’s co-founder and former CEO, alluded to the company’s struggles to get payers to cover its product as a major contributor to its financial troubles, Healthcare Brew previously reported.
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And Akili Interactive, a company that created the first FDA-authorized prescription video game to treat ADHD in children, switched to a direct-to-consumer business model in September 2023 after failing to convince payers to cover the product.
What does this mean for digital therapeutics?
The move could have widespread implications for the digital therapeutics industry.
“A lot of companies that came before us were waiting for these sort of payment mechanisms to come out that would allow for scalable reimbursement of digital therapeutics,” Raj Amin, co-founder and CEO of digital therapeutics company Arcade Therapeutics, told Healthcare Brew.
Arcade Therapeutics develops game-based therapies to treat mental health conditions like anxiety, depression, and addiction. Its FDA-cleared products would be covered under the proposed codes, Amin said.
Besides opening digital therapeutics up to more widespread payer coverage, the proposed CMS codes could also boost investor confidence in the industry, Hauflaire said.
A barrier to increased investment in digital therapeutics in recent years “is that there has been a lack of a scalable reimbursement pathway,” she said. “What this proposal does is make a reimbursement pathway scalable, so it’s not just one health plan that is reimbursing for one product and everything is a one-off.”
What happens next?
CMS is seeking public comment on the proposed codes through September 9, during which time individuals, companies, and groups like the DTA can provide feedback, ask questions, and advocate for changes in the proposed rule.
Though, Hauflaire said, there’s already one question that will need to be worked out: What exactly qualifies as mental health?
Until that is answered, it’s unclear how many digital therapeutic companies will be able to submit their products for reimbursement.
Once the codes are finalized, the DTA will work with its roughly 100 member companies to figure out how to implement them, Hauflaire said. And clinicians will need to be trained on using the codes and understanding how they fit into current workflow processes.
Overall, the proposed codes are “a huge vote of support for the digital therapeutics industry,” Amin said. “CMS is sending the signal that [digital therapeutics] are going to be an important element of the care protocols that are available to patients now…because it really validates digital therapeutics as an important set of treatments that are available to patients.”