On July 10, 2024, the Centers for Medicare & Medicaid Services (CMS) unveiled a pivotal policy update with the release of its proposed 2025 Physician Fee Schedule (PFS). In it, CMS introduced three new billing codes that signal a major shift: Medicare reimbursement for digital mental health is finally on the table. This marks a watershed moment for providers, startups, and the broader behavioral health industry.
The proposed codes are designed to reimburse clinicians for using FDA-cleared digital mental health treatment (DMHT) devices as part of a comprehensive care plan. This change not only opens the door for greater tech adoption but also addresses a long-standing gap in behavioral health service delivery—access and scalability.
Breaking Down the New Digital Therapeutics Codes
CMS’s proposed codes focus on three key actions:
- Initial device supply and patient onboarding
- The first 20 minutes of data review each month
- Each additional 20 minutes of monthly data review
These new HCPCS codes are modeled after those used for remote therapeutic monitoring (RTM) in physical health, but they are specifically tailored to behavioral health. Most importantly, they enable Medicare reimbursement for digital mental health tools that support therapy under a treatment plan and meet strict regulatory standards.
Cautious Progress: CMS’s Intentions Behind the Rule
While the move marks progress, CMS is deliberate in its approach. The agency aims to balance access with evaluation. In its own words:
“We aim to both provide access to vital behavioral health services and gather further information about the delivery of digital behavioral health therapies, their effectiveness, their adoption by practitioners…”
This caution underscores CMS’s dual goal—support innovation, but ensure it works. That means Medicare reimbursement for digital mental health will initially apply only to FDA-cleared tools shown to deliver measurable therapeutic benefits.
Contractor Pricing: A Flexible Yet Fragmented Solution
A major question still lingers: what will these services cost?
Because prices for digital therapeutics vary dramatically—from free apps to subscription-based models—CMS has left pricing up to regional contractors. This approach, known as “contractor pricing,” provides needed flexibility but may lead to regional inconsistencies. Still, it lays the groundwork for eventual standardization, a necessary step for sustainable Medicare reimbursement for digital mental health tools.
Why This Matters: The Struggle and the Promise
The behavioral health industry has seen high hopes—and high-profile setbacks—when it comes to digital therapeutics. Companies like Pear Therapeutics and Akili, both pioneers in the field, collapsed largely because of one reason: the market wasn’t ready to support them financially. Without clear reimbursement pathways, even FDA-cleared tools struggled to survive.
CMS’s proposed rule could change that. With clear billing codes and a reimbursement structure, Medicare reimbursement for digital mental health may finally give these technologies the financial viability they’ve long lacked.
Tech Adoption Is the Future of Behavioral Health
Despite past failures, the future of behavioral health is undoubtedly more digital. Many large behavioral health organizations are already investing in:
- Digital CBT programs
- App-based symptom tracking
- Virtual and hybrid care platforms
- AI-powered screening and support tools
These tools aren’t meant to replace therapists but to support and extend care. That’s why Medicare reimbursement for digital mental health matters. It creates a framework for scalable, tech-enabled care delivery that’s both clinically informed and financially sustainable.
Looking Ahead: A Turning Point for Policy, Practice, and Innovation
The 2025 Physician Fee Schedule proposal doesn’t just introduce new codes—it signals a cultural shift within CMS. After years of viewing digital health tools with skepticism, the agency is opening the door—carefully, but clearly—for their integration into mainstream behavioral health.
This is more than an administrative change. It’s a chance to reshape how mental health care is delivered and accessed in the U.S. And while the road ahead still involves hurdles around adoption, pricing, and regulation, one thing is clear: Medicare reimbursement for digital mental health is no longer a distant dream. It’s a developing reality.
For providers, that means new opportunities to deliver higher-quality care. For digital health innovators, it means a clearer path to market viability. And for patients, it means improved access to evidence-based tools that can make a meaningful difference in their mental health journey.
As the CMS rule progresses toward finalization, stakeholders across the behavioral health ecosystem will be watching closely. The future of mental health is digital—and with Medicare reimbursement for digital mental health, that future is coming into focus.
