Is Digital Therapeutics Finally Having Its Moment?

CMS is proposing expanding coverage of digital health devices used in some behavioral health treatment programs and asking for comments on adding even more devices. But will that be enough to spur adoption?

One line of thinking around the Trump Administration’s MAHA movement is that it might open the door to new ideas for healthcare delivery. Supporters of digital therapeutics may now be seeing that benefit.

CMS’ proposed 2026 Medicare Physician Fee Schedule includes expanded coverage for the use of ‘sensor-based digital health technologies (sDHTs)’ designed to deliver therapeutic interventions. The agency is proposing to:

• Extend eligibility under HCPCS codes GO552-554 to include devices classified under CFR 882.5803 (ADHD), expanding upon coverage established in the 2025 Medicare PFS that was limited to devices classified under CFR 882.5801 (psychiatric disorders).

In addition, CMS is considering expanding coverage to FDA-authorized digital therapeutic devices classified under CFR 876.5960 (gastrointestinal conditions), CFR 882.5705 (sleep disturbance in psychiatric conditions) and CFR 882.5804 (fibromyalgia symptoms).

Finally, CMS is seeking feedback on the possibility of creating separate billing codes for digital therapeutic tools that fall below FDA purview and track treatment adherence or patient progress, as well as tools that support healthy behaviors as part of a behavioral healthcare plan.

In a blog on her website, Carrie Nixon, managing partner of the Nixon Law Group, says the proposals mark a “growing support for digital mental health treatment (DMHT) while laying important groundwork for the future of digital therapeutics across a range of clinical use cases.”

“This is a catalytic moment for the life sciences industry,” Jennifer Goldsack, CEO of the Digital Medicine Society (DiMe), said in a LinkedIn post co-authored by DiMe Program Lead Sarah Averill Lott, MPH, CPH. “For the first time, sensor-based technologies are now included alongside AI/ML-enabled and AR/VR tools in a publicly available FDA dataset, with therapeutic area, clearance date, and review panel all listed. That simple act carries weight. It reflects the FDA’s growing recognition that sDHTs are part of mainstream healthcare and drug development. It also brings increased visibility to the growing number of devices authorized for market access that generate data already being used in trials as digital endpoints.”

With this new designation, CMS is recognizing that new devices need to not only monitor patients outside the hospital, doctor’s office or clinic, but also deliver some sort of treatment. This separates digital therapeutics from remote patient monitoring technology, including CMS’ remote therapeutic monitoring (RTM) guidelines.

“Traditional RTM operates on a clear premise: devices passively collect data, providers actively interpret it,” Justin Brochetti, co-founder and CEO of intelligencefactory.ai, said in a LinkedIn post. “A wearable tracking post-surgical knee mobility reports range of motion but doesn’t treat the patient. A spirometer monitoring COPD measures lung function but doesn’t deliver therapy.”

Digital therapeutics, he added, “obliterate this boundary. They actively deliver therapy, not merely monitor patient engagement with it. When a patient works through cognitive restructuring exercises on an FDA-cleared digital platform, that's simultaneously monitoring depression symptoms and treating depression.”

By separating digital therapeutics from RTM technology, CMS is creating a new category of digital health that is FDA-regulated and assessed by different KPIs.

Why Hasn’t Digital Therapeutics Done Better?

The challenge with digital therapeutics has always been sustainability: Will enough doctors offer these services and will enough patients choose to use them. Based on claims data, CMS has seen limited use so far, leading some to question whether providers are scared away from using the technology because they don’t want to pay for it.

In her blog, Nixon lays the blame for low adoption on the challenges of the Medicare Administrative Contractors (MAC) market.

“To date, CMS has not assigned reimbursement for the DTx device to be used with DMHT, deferring to the MACs to establish contractor pricing for each device,” she points out. “Many DTx companies – much less practitioners -- simply don’t know how to approach the MACs to secure contractor-based pricing, which remains the only reimbursement pathway in the absence of a national rate for G0552. For the vast majority of digital health stakeholders, the MAC process is opaque, inconsistently applied, and logistically difficult to navigate.”

“Despite this significant barrier to adoption, CMS proposes retaining the contractor-pricing status for G0552, citing the diversity of technologies in this space and the challenge of establishing a uniform national rate at this stage,” she says.

Because of low adoption rates, there isn’t much data to show that digital therapeutics are improving clinical outcomes – a familiar refrain for many new technologies.

Nixon notes that CMS is also considering creating billing codes for digital therapeutic devices that don’t need FDA approval, such as apps or platforms that support adherence, monitor patient progress or encourage healthy behaviors as part of a treatment plan (think diet and nutrition in chronic care management). The agency is asking for comments on:

• Clinical evidence that would support these tools;
• How they would fit into behavioral health treatment;
• Whether they would need lower-intensity billing codes, and what payment rates would be appropriate; and
• How they would be validated and reimbursed.

Laying the Groundwork for Digital Health

With the deadline for comments to CMS on the proposed PFS set for September 12, Nixon calls this a “critical moment” for digital therapeutics advocates. The agency, she says, is not only deciding how digital therapeutics should be supported in the future but how they should be reimbursed.

In his social media analysis, Brochetti said the proposed PFS, pending final approval, could lay the groundwork for a wave of digital health innovation.

“The DMHT framework represents more than mental health policy because it's Medicare's blueprint for regulating active digital therapeutics,” he wrote. “As AI-powered diagnostic tools, VR rehabilitation platforms, and other intelligent healthcare technologies emerge, they'll likely follow this model rather than traditional device categories.”

“This matters for strategic planning because it signals CMS' approach to emerging technologies: specialized frameworks for interventions that don't fit traditional medical device or therapy service categories,” he added.