Blog | 1/16/2025
2025 Medicare PFS: A Positive Evolution of Reimbursement for Digital Health
By Jeff Abraham, Partner, and Shreya Saraf, Director
The Calendar Year (CY) 2025 Medicare Physician Fee Schedule (PFS) proposed by CMS introduces several significant changes aimed at enhancing care delivery and reimbursement structures. These reflect a commitment to integrating digital health solutions into Medicare services, improving access and flexibility for both patients and providers and opening up paths to commercialization for digital health players.
The expansion and extension of telehealth services is a step in the right direction to meet the evolving needs of healthcare delivery in a post-pandemic world. Audio-only communication will be included, reducing significant barriers to care for patients who are unable to navigate or access video technologies. CMS will continue to allow ‘direct supervision’ via audio/video technologies, a practice established during the pandemic that brings better real-time care to remote locations. The PFS will also add several services to the telehealth list including caregiver training and INR monitoring.
Further, this change will also incorporate digital therapeutics into treatment plans – new HCPCS codes (G0552, G0553, and G0554) for the billing of digital mental health treatment devices used in conjunction with behavioral healthcare will enhance patient engagement and outcomes and further drive innovation with a path-to-payment for Digital therapeutics in the mental health space.
This marks the most significant reimbursement change in the DTx SaMD space to date. Two out of the three codes (G0553, and G0554) have established national pricing, albeit relatively low. However, the G0552 code, which covers the supply, delivery, and patient instruction of the mental health SaMD is currently contractor priced.
However, several open questions remain. At a high level:
- What will the Part B Medicare Administrative Contractors (MACs) establish for contractor pricing?
- Will there be coverage policies in place?
- What will commercial insurers and managed care organization do regarding these codes?
- Will the reimbursement be sufficient to support new business models and growth for DTx?
Authors
- Jeffrey Abraham, Partner, Co-leads Health Advances’ Health IT and Digital Health practice
- Shreya Saraf, Director, member of Health Advances’ Health IT and Digital Health practice