After years of uncertainty around digital therapeutics reimbursement, the industry is finally beginning to gain clarity. Digital therapeutics (DTx) are evidence-based treatments delivered through software interventions to treat or manage medical conditions. Unlike traditional therapies, DTx uses digital platforms—apps, video games, or interactive programs—to deliver treatment, often targeting behavioral health, chronic diseases, or cognitive impairments.
In the past year, digital therapeutics have made significant strides with both commercial insurers and Medicaid programs, signaling a shift toward broader adoption. Earlier this year, state Medicaid programs in Massachusetts and Oklahoma announced partnerships to cover certain digital therapeutics, marking a notable step in digital therapeutics reimbursement. Meanwhile, Highmark, a nonprofit health insurance plan, became the first commercial insurer to cover specific FDA-cleared digital therapeutics, opening the door for wider commercial coverage.
The Growing Role of Digital Therapeutics in Behavioral Health
Behavioral health is a primary focus for digital therapeutics. These software-based treatments offer patients and providers an alternative to traditional therapies, including medications and in-person behavioral interventions. Industry insiders believe these technologies could reshape how behavioral health care is delivered, making treatments more accessible, personalized, and data-driven.
“This announcement clearly shows the shifting attitudes towards DTx, from being considered experimental and investigational to being recognized as legitimate, safe, and effective treatment for patients [by] increasing access to therapy where they are and when they need it most,” said Dr. Benny Alouf, Chief Medical Officer at Limbix, a startup developing a digital therapeutic for adolescent depression. “It moves this class of therapeutics from being labeled en-masse as not covered to creating real medical guidelines for approval and coverage. And [it lends] legitimacy to the FDA process, which these products must go through.”
Limbix has raised $31 million to advance its adolescent depression digital therapeutic. Although it has not yet received FDA clearance, its progress highlights the growing investor and market confidence in DTx solutions.
Historic Reimbursement Challenges
Despite regulatory progress, securing digital therapeutics reimbursement has been one of the industry’s biggest challenges. The path began in 2017, when Pear Therapeutics received FDA De Novo clearance for Pear ReSET, a digital therapeutic targeting substance use disorder. Since then, numerous digital therapeutics have received FDA 510(k) clearance, demonstrating safety and effectiveness.
However, achieving coverage has been difficult. “If it’s not a pharmaceutical, it is extremely difficult in today’s world to get broad-based coverage for novel modalities,” said Eddie Martucci, CEO of Akili, which develops video-game-like digital therapeutics for children with ADHD. Akili’s therapeutic, cleared through the FDA 510(k) pathway, recently went public via a SPAC merger, highlighting the growing investor interest despite coverage challenges.
Behavioral health therapy has historically faced access barriers, with many patients relying solely on medication due to limited therapy availability. Digital therapeutics have the potential to address these gaps, providing flexible, evidence-based interventions directly to patients. Still, until reimbursement becomes widespread, patients and providers often must advocate for coverage themselves.
Federal and Legislative Attention
The federal government has recognized the promise of digital therapeutics. In April, the Biden administration included reimbursement strategies for DTx in its National Drug Control Strategy, encouraging health plans to explore coverage options for motivational incentives and digital therapy. The report noted that such strategies would require establishing billing codes and reimbursement parameters, a key step toward standardized digital therapeutics reimbursement.
Legislative support is also emerging. The proposed Access to Prescription Digital Therapeutics Act of 2022 aims to expand coverage for Medicare and Medicaid beneficiaries, ensuring that patients have broader access to these therapies.
Leading Companies and Real-World Applications
Several companies are driving adoption and securing coverage agreements. Pear Therapeutics has been a leader, securing Medicaid coverage in Massachusetts and Oklahoma for its ReSET and ReSET-O programs, which treat substance use disorder. Dr. Corey McCann, president and CEO of Pear, explained that state Medicaid programs have been easier to work with than commercial payers, who often lag in recognizing novel therapies.
Highmark’s decision to cover eight FDA-cleared digital therapeutics represents a critical milestone for commercial insurers. This coverage includes both behavioral health and cognitive-focused therapeutics, setting a precedent for other health plans to follow. “Highmark has taken the lead and paved the way for other health plans to recognize these therapies as legitimate, worthy of reimbursement and much needed for their members,” Dr. Alouf said.
Big Health, another leader in digital therapeutics, develops Sleepio for insomnia and Daylight for anxiety. Co-founder Peter Hames emphasized the importance of demonstrating ROI to payers, arguing that strong evidence of effectiveness should make commercial coverage decisions straightforward.
Creating a Pathway for Reimbursement
Reimbursement will likely depend on both payer engagement and the establishment of formal billing codes. In 2021, the Centers for Medicare & Medicaid Services (CMS) introduced a Level II Healthcare Common Procedure Coding System (HCPCS) code for “Prescription digital behavioral therapy, FDA cleared, per course of treatment.” This code simplifies coverage for both commercial and Medicaid plans, potentially driving wider adoption of digital therapeutics reimbursement.
Commercial insurers are still catching up. Dr. McCann noted, “Commercial payers can and will deny care, and that’s really where we’ve been leaning in with the states to make this standard reimbursement to then force commercial payers.” By establishing Medicaid coverage, companies hope to create a benchmark that commercial insurers cannot ignore.
The Future of Digital Therapeutics
The industry consensus is that evidence and ROI will be the next frontier. Companies must continue to develop robust datasets demonstrating both clinical effectiveness and economic value. “All players in the space are developing health economic datasets to convince payers that there’s a positive ROI on incorporating these products into their patient populations,” McCann said.
As coverage expands, patients could access DTx for a range of behavioral health conditions, including depression, anxiety, ADHD, insomnia, and substance use disorders. Prescribers eligible to recommend these treatments include medical doctors, psychologists, licensed mental health social workers, licensed professional mental health counselors, and advanced practice providers, ensuring clinical oversight.
Digital therapeutics are poised to reshape the behavioral health landscape, offering more accessible, evidence-based, and flexible treatment options. With increasing regulatory support, commercial adoption, and ongoing data collection, digital therapeutics reimbursement is becoming a reality—and a critical step toward the mainstream integration of these transformative therapies.
