Sponsors (10)
The bill expands Medicare and (optionally) Medicaid coverage and creates payment and reporting mechanisms to increase access to FDA-cleared digital therapeutics, but it raises public spending, administrative complexity, and risks around transparency and market entry that could offset some benefits.
Medicare beneficiaries will gain Part B coverage for FDA-cleared prescription digital therapeutics starting Jan 1, 2026, lowering out-of-pocket costs and expanding non-drug treatment choices for many seniors and disabled enrollees.
Medicaid beneficiaries in states that adopt the policy could gain coverage for FDA-authorized prescription digital therapeutics, improving access to evidence-based digital treatments—especially for people with chronic conditions and residents of rural or provider-shortage areas.
Hospitals, health systems, and providers will have clearer reimbursement pathways—through product-specific HCPCS codes and payment methodologies—making it easier to prescribe, integrate, and be paid for covered digital therapeutics.
Medicare (and therefore taxpayers and the Medicare Trust Fund) will likely face higher program spending once Part B pays for prescription digital therapeutics, increasing fiscal pressure on the program.
States that adopt Medicaid coverage for prescription digital therapeutics may face increased Medicaid spending and budgetary pressure, potentially forcing trade-offs with other state priorities or prompting cost controls.
If states cover expensive digital therapeutics without strict effectiveness criteria, Medicaid beneficiaries and taxpayers could pay for treatments with limited evidence of benefit.
Based on analysis of 3 sections of legislative text.
Establishes Medicare and Medicaid coverage rules for FDA-cleared prescription digital therapeutics, sets Medicare payment/coding, and mandates manufacturer price/volume reporting with penalties.
Introduced May 8, 2025 by Kevin Hern · Last progress May 8, 2025
Creates a Medicare coverage category and payment rules for FDA-cleared prescription digital therapeutics (PDTs), requires manufacturers to report private-payor prices, volumes, and user counts, and adds PDTs to the Medicaid definition of medical assistance. Coverage and reporting take effect for items furnished on or after January 1, 2026; CMS must set a Medicare payment methodology within one year and establish permanent billing codes within two years. Establishes civil monetary penalties (up to $10,000/day) for false or missing manufacturer reports, requires temporary product-specific HCPCS codes until permanent codes are issued, and protects certain reported data under existing confidentiality rules used for Medicaid drug reporting.