cms finalizes limited digital health policies in medicare fee schedule

The Centers for Medicare & Medicaid Services (CMS) has released the final rule for the calendar year 2025 physician fee schedule (PFS).

CMS's Frustration with Digital Health Payment Policies

CMS has expressed frustration over its constrained authority regarding digital health payment policies, particularly in the realms of digital therapeutics and telehealth.

New Codes for Digital Therapeutics

The final rule highlights CMS's limited capacity to expand Medicare telehealth coverage. CMS has introduced new codes for digital therapeutics aimed at mental healthcare. CMS has made strides in reimbursing digital therapeutics through the introduction of new codes. The payment structure for digital therapeutics is modeled on remote therapeutic monitoring codes. Concerns have been raised regarding potential confusion among providers due to the overlap between digital therapeutics and existing codes.

Urgent Need for Congress to Act

The final rule underscores the urgent need for Congress to act in extending key Medicare telehealth waivers that have been in place since 2020. CMS aims to preserve some important flexibilities while expanding access to telehealth services where feasible. CMS has made audio-only telehealth visits permanent and will allow direct supervision via telehealth in specific cases. CMS has called for legislative action to address geographic and originating site restrictions that currently limit telehealth access for Medicare beneficiaries. CMS requires additional authority from Congress to enable certain provider types to offer telehealth services to Medicare beneficiaries. CMS has stated that it will not review individual codes until a comprehensive analysis can be conducted.

Payment Parity for Telemental Health Services

The 2022 PFS established payment parity for telemental health services provided by rural health clinics (RHCs) and federally qualified health centers (FQHCs). For 2025, CMS has decided to maintain its existing telehealth payment methodology for non-behavioral health visits provided in RHCs and FQHCs.

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