Building Value into Reimbursement for Prescription Digital Therapeutics

Summary

Digital health technologies (DHTs) have emerged as a promising category of health care interventions that leverage technology to prevent, manage, or treat medical conditions. Over the last few years, the U.S. has witnessed rapid growth in the development, regulation, and adoption of DHTs across different disease areas. Accordingly, notable progress has been made in payment for some types of DHTs. However, significant challenges remain for reimbursement of some categories of DHTs, particularly prescription digital therapeutics (PDTs)—defined as health software that delivers a medical intervention to treat or manage a disease, disorder, condition, or injury. For years, the lack of a clear CMS benefit category for PDTs has historically made establishing coverage and coding structures particularly challenging. As a result, both public and private payer coverage of these products has been limited.

The 2025 Physician Fee Schedule represents a turning point, with the first reimbursable codes for PDTs. However, this only applies to a limited number of products and the PFS continues to state that a statutory amendment is needed for broader PDT coverage. This issue brief investigates the opportunity to integrate PDTs into Medicare reimbursement structures in ways that center on value and outcomes. In this issue brief, we describe:

• how the different types of current benefit categories promote or hinder payment for value and the ability to differentiate PDT products that show evidence of better patient outcomes;

• the importance of ensuring coding and payment allows flexibility for how the functionality of PTDs tools will continue to evolve over time; and
• methods to develop more effective evidence of performance for these tools.