New Reimbursement for Digital Mental Health Treatment in the 2025 Medicare Physician Fee Schedule Proposed Rule

In the recently released 2025 Medicare Physician Fee Schedule Proposed Rule (the “Proposed Rule”), the Centers for Medicare & Medicaid Services (CMS) created a new reimbursement pathway for “Digital Mental Health Treatment” (DMHT) devices and services.  As we mentioned in our overview of the Proposed Rule, this new pathway is a major step in the right direction for reimbursement of digital therapeutics (DTx) interventions more broadly.    

CMS initially opened the door in 2023 for digital Cognitive Behavioral Therapy (CBT) devices with the addition of CPT Code 98978 for “device supply” to monitor cognitive behavioral therapy under the Remote Therapeutic Monitoring (RTM) code set. However, CMS declined to establish a national payment amount for the CBT device supply code. The lack of assigned reimbursement for CBT devices, combined with stakeholder concerns that the device supply code should encompass treatment interventions as well as monitoring, resulted in low provider adoption of the RTM codes for CBT.

 In last year’s 2024 Medicare Physician Fee Schedule Proposed Rule, CMS included a Request for Information on use cases for digital health and digital therapeutics interventions. Responses by advocacy organizations like the American Telemedicine Association and the Digital Therapeutics Alliance likely shaped the agency’s thinking in developing the new DMHT code set.  

Three New HCPCS Codes for Digital Mental Health Treatment Devices

CMS proposes to create three new HCPCS codes for reimbursement of a DMHT device and associated services. The codes are modeled in part on the existing CPT codes for Remote Therapeutic Monitoring (RTM) services. According to CMS, the term “DMHT” is a refinement of the "digital cognitive behavioral therapy" terminology used in reference to the RTM codes for monitoring Cognitive Behavioral Therapy interventions in prior proposed rules. 

• GMBT1: Supply of digital mental health treatment device and initial education and onboarding per course of treatment that augments a behavioral therapy plan.

• GMBT2: First 20 minutes of monthly treatment management services directly related to the patient’s therapeutic use of the DMHT device, requiring at least one interactive communication with the patient/caregiver during the calendar month.

• GMBT3: Each additional 20 minutes of monthly treatment management services directly related to the patient’s therapeutic use of the DMHT device, requiring at least one interactive communication with the patient/caregiver during the calendar month.

CMS proposes that the DMHT codes would be ordered and billed by “physicians and practitioners who are authorized to furnish services for the diagnosis and treatment of mental illness.”  CMS also suggests that a patient could use the DMHT device “at home or perhaps in an office or other outpatient setting, if that is how the device has been cleared by FDA for use under 21 CFR 882.5801 [describing computerized behavioral therapy device for psychiatric disorders.]”

Limiting Reimbursement to “FDA Cleared” Digital Mental Health Devices

As noted above, the Proposed Rule recommends that GMBT1 would be reimbursable “only if the DMHT device has been FDA cleared and the billing practitioner incurs the cost of furnishing the device to the beneficiary.”  The Proposed Rule also requires that such FDA clearance occurs under 21 CFR 882.5801, which is limited to substance abuse disorder, insomnia, and depression.

With these requirements, CMS raises the bar on what is required for a DMHT device to qualify for reimbursement; the existing RTM code set only requires use of a “device” that meets the FDA’s definition. CMS’s more stringent requirements for DMHT devices are intended to ensure the DMHT device has “demonstrated a reasonable assurance of safety and effectiveness” and that “the FDA makes a determination of safety and effectiveness” based upon “valid scientific evidence.” CMS is presumably adopting this standard to prevent general behavioral health and wellness interventions from qualifying for reimbursement under the proposed DMHT codes – a departure from CMS’ approach to the RTM code set.

However, based on current FDA product classification codes associated with 21 CFR 882.5801, the “clearance” requirement could significantly limit the applicability of the DMHT codes to only those CBT products (1) intended for use in treating substance abuse disorder, insomnia, or depression; and (2) cleared through a 510(k) pre-market notification process.

Taken literally, these restrictions would exclude use of the DMHT codes for all other mental health conditions and exclude mental health devices that are subject to FDA’s enforcement discretion, 510(k)-exempt, granted a De Novo designation, or approved via a Pre-Market Approval even when the DMHT device has demonstrated reasonable assurance of safety and effectiveness by other means, including with valid scientific evidence.  In other words, even a clinically safe and effective DTx product developed for mental health treatment would not qualify for reimbursement under the DMHT device supply code unless it had gone down the FDA clearance pathway. Such a restriction could pose a significant barrier to adoption, effectively excluding various devices and behavioral health conditions from reimbursement under the new DMHT codes.

Comments on DMHT Codes Requested

In addition to general comments from stakeholders, CMS is explicitly seeking comments on several specific aspects of the proposed DMHT code framework, including the following:

• Should DMHT device reimbursement be payable if the device has NOT been cleared by FDA for the specific DMHT intended use, but HAS been cleared by FDA for another intended use (i.e., an “off-label” use)?

• Should DMHT device reimbursement be payable for devices cleared by FDA under regulations other than 21 CFR 882.5801 (e.g. for conditions other than substance abuse disorder, insomnia, and depression)?

• Should payment be limited if a patient discontinues use of a DMHT device before completing a course of treatment?

• Should payment be limited to a set number of DMHT devices per calendar month per patient?

• What is the appropriate contractor pricing for supply of a DMHT device?

Key Takeaways

The new Digital Mental Health Treatment codes by CMS represents a long-awaited and significant step forward for the digital therapeutics industry. While these particular codes are limited to mental health conditions, their introduction is an acknowledgement by CMS of the clinical and economic value of digital mental health treatments that can potentially accelerate new reimbursement pathways for DTx interventions across the board.

However, requiring all DMHT devices to be FDA-cleared (as opposed to simply meeting the FDA’s definition of a device – the requirement for devices used with the Remote Therapeutic Monitoring code set) may pose a significant barrier to widespread adoption of the new codes, as many DMHT/DTx devices already in the market have taken a different FDA regulatory pathway.

CMS is clearly asking for feedback around its proposal, and this presents a tremendous opportunity for stakeholders to have real influence in shaping the details of the codes as they will appear in the 2025 MPFS Final Rule.  

Whether it’s assisting you with drafting comments to the Proposed Rule (Note! the due date is September 9th!) or talking through how to incorporate these new codes into your business model, we’re here to help! Contact us to set up an appointment.

And don’t forget to check out our article on the new proposed Advanced Primary Care Management codes!

Thank you to Nixon Gwilt Law’s Michael Schellhous and Sam Pinson for their contributions to this post!