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July 30, 2025 – It’s been more than two weeks since the release of the CY 2026 Medicare Physician Fee Schedule (PFS) proposed rule. We’ve had a chance to digest our initial helping and now we’re ready for seconds. We thought we would see this administration leverage the PFS to drive progress on virtual care and digital health. We were right. The Centers for Medicare & Medicaid Services (CMS) proposed both large and small changes that could have significant impacts on how patients and providers use digital healthcare now and into the future.
To dig into the digital health policies in the PFS proposed rule, I’m handing my Regs & Eggs kitchen apron to my colleagues Rachel Stauffer and Julia Grabo.
Background: While Congress would still need to act by September 30, 2025, to continue pandemic-era Medicare flexibilities that allow for much of the current coverage of telehealth services, CMS uses a five-step process for evaluating if a code should be on the provisional (i.e., temporary) or permanent telehealth list (or neither). If a code makes it through step three and stalls out, it goes on the provisional list. If a code makes it all the way through step five, congratulations, the code goes on the permanent list. CMS has tried in recent years to make this process clearer, but stakeholders have continued to provide mixed reviews.
Things to note: CMS proposes to eliminate steps four and five of the review, which are the steps that have proven challenging for some stakeholders. Guess what that means? No more provisional list. All codes currently on the provisional list would be added to the permanent list.
Background: Just last year, CMS took a large step forward in reimbursement of digital therapeutics by allowing Medicare payment to billing practitioners for digital mental health treatment (DMHT) devices cleared by the US Food and Drug Administration (FDA). CMS limits payment to instances where the services are furnished incident to or integral to professional behavioral health services and are used in conjunction with ongoing behavioral healthcare treatment under a behavioral health treatment plan of care. The billing practitioner must diagnose the patient with a mental health condition and prescribe or order the DMHT device.
Things to note: CMS proposes to expand Medicare payment for certain DMHT services to include devices that are FDA-cleared or authorized for treating attention deficit hyperactivity disorder. CMS asks for public feedback on whether to add coverage for other digital therapy devices for conditions such as gastrointestinal symptoms, sleep disturbance, or fibromyalgia. CMS also requests input on the possibility of establishing additional separate coding and payment for a broader set of digital tools to maintain or encourage a healthy lifestyle as part of a mental health treatment plan of care, including recommendations on how these services should be priced. Finally, CMS seeks feedback on related digital device policies for consideration in future rulemaking.
Background: Another pandemic-era flexibility that had been extended through the end of this calendar year is allowing distant site practitioners to use their currently enrolled practice location instead of their home address when providing telehealth services from their home. Many practitioners did not want their home address listed on claims.
Things to note: There is no discussion in the proposed rule regarding this flexibility. Therefore, barring some other proposed extension, this temporary policy will expire at the end of CY 2025.
Background: The Medicare Diabetes Prevention Program (MDPP) is an evidenced-based behavioral intervention that aims to prevent or delay the onset of type 2 diabetes for eligible Medicare beneficiaries diagnosed with prediabetes. While the MDPP originally garnered a lot of excitement, uptake has been low. Stakeholders have attributed this to antiquated reporting processes and in-person requirements.
Things to note: CMS proposes three pretty big changes for virtual care providers:
These changes would be tested through December 20, 2029. If these proposals are finalized, many more virtual care platforms could provide MDPP services and drive those participation numbers up.
Background: In recent years, CMS has expanded payment for remote monitoring services, which generally use digital technologies (primarily medical devices, together with software) to collect medical and other forms of health data from a patient in one location and electronically transmit the information to the patient’s healthcare provider in a different location for assessment and care management. CMS tackled payment for remote physiological monitoring (RPM) in 2019 and remote therapeutic monitoring (RTM) in 2022. The agency has since handled emerging new technologies carefully. Some stakeholders have urged changes to a specific policy that requires 16 days per month of data collection for RPM and RTM codes. The policy was waived during the COVID-19 public health emergency and has since been reinstated.
Things to note: The proposed rule includes several policy proposals around newly adopted RPM and RTM codes. These include codes that would reimburse devices with two to 15 days per month of data collection (addressing stakeholder concerns), as well as codes to reimburse treatment management services for the first 10 minutes in a month (as opposed to requiring 20 minutes in a month). CMS’s proposals mostly address how reimbursement will be calculated for services reported under these codes.
CMS included two requests for information (RFIs) that digital health stakeholders should review.
First, under the Make America Healthy Again theme, CMS asks for feedback on expanded treatment options and flexibility for insurance coverage and benefits around lifestyle changes and disease prevention. The RFI includes callouts to:
The RFI solicits specific feedback on creating separate coding and payment for motivational interviewing and use of health coaches.
You can see CMS potentially acting on expanding coverage for some of these in the final rule.
Second, CMS solicits comments on challenges related to appropriately accounting for services that include innovative technology such as software algorithms and artificial intelligence (AI) in the agency’s practice expense methodology. As we all know, this is a growing area of interest for many stakeholders. CMS is concerned about the rapidly changing nature of technology and the difficulty of obtaining verifiable and consistent costs from manufacturers. CMS seeks feedback on how the use of software as a service and AI technology affects management of chronic disease and primary care services, and how to incorporate those costs into the current strategy for paying for evolving models of care delivery.
While that was a large second helping of the CY 2026 PFS proposed reg, there is definitely room to go back for thirds and fourths. With comments due on September 12, 2025, stakeholders have their plates full as they review all the “delicious” proposals.
Until next week, this is Rachel and Julia (filling in for Jeffrey) saying, enjoy reading regs with your eggs.
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