Medicare has a hard time developing coding, coverage, and payment for software - for AI, for FDA-approved apps, etc. Witness the extensive discussion of this topic in a recent MEDPAC report to Congress (here).
In early July, as part of annual PFS or "physician fee schedule" policymaking, CMS announced new codes and plans to cover certain mental-health apps, here. See discussion at AXIOS here. See FIERCE HEALTHCARE here.
In the currently available "inspection copy" or "typescript" of the PFS rule, the topic has coding on page 227 and discussion on pages 377-384.
Digital Pathology Connections?
I've included an AI summary below. I haven't attempted to connect the dots here, but there are probably some potential analogies to Medicare thinking and Medicare payments for other kinds of software, such as FDA approved digital pathology applications.
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AI CORNER
[Start Chat GPT 4]
The Centers for Medicare & Medicaid Services (CMS) have proposed significant updates to the coverage and payment policies for digital mental health treatment (DMHT) devices as part of the CY 2025 Payment Policies under the Physician Fee Schedule (PFS). This proposal is driven by the evolving field of digital therapeutics and the increasing demand for mental health services, particularly given the nationwide behavioral health workforce shortages.
Key Details of the Proposed CMS Policy
Objectives and Justification
CMS aims to:
- Enhance Access: Increase access to vital behavioral health services using innovative digital therapeutics.
- Gather Data: Collect information on the effectiveness, adoption, and use of digital behavioral health therapies.
- Align with FDA and SAMHSA: Follow the regulatory frameworks and definitions set by the FDA and SAMHSA for digital therapeutic devices.
Proposed Policy Specifics
New HCPCS Codes:
- GMBT1: For the supply of a digital mental health treatment device and initial education and onboarding per treatment course. Conditions include:
- FDA clearance for the device.
- Costs incurred by the billing practitioner.
- Use as part of an ongoing treatment plan prescribed by the practitioner.
- Incident to the practitioner's professional services.
- GMBT2: For the first 20 minutes of monthly treatment management services related to the DMHT device, including data review and at least one interactive communication.
- GMBT3: For each additional 20 minutes of monthly treatment management services, with similar requirements to GMBT2.
- GMBT1: For the supply of a digital mental health treatment device and initial education and onboarding per treatment course. Conditions include:
Pricing and Payment:
- Contractor Pricing: Due to the variability in costs, contractor pricing is proposed for GMBT1.
- Crosswalk Methodology: GMBT2 and GMBT3 are proposed to be valued based on crosswalks to existing CPT codes for remote therapeutic monitoring (98980 and 98981).
Regulatory Compliance:
- Devices must be FDA cleared under 21 CFR 882.5801, ensuring safety and effectiveness.
- DMHT devices must generate and deliver mental health treatment interventions with demonstrable positive therapeutic impacts.
Alternatives and Public Comments
CMS has sought public feedback on several aspects:
- Device Clearance: Whether payment should be made for devices cleared by the FDA for uses other than mental health treatment.
- Discontinuation of Use: How payments might be limited if a patient discontinues the use of the device before completing the treatment course.
- Monthly Device Limits: Whether there should be a limit on the number of devices furnished per patient per month.
- National Pricing Methodology: Suggestions on appropriate national pricing methodologies and potential crosswalks.
Public Feedback and Future Considerations
CMS is open to public comments on:
- The proposed elements and requirements for care management services.
- Alignment of the proposed services with other Medicare programs and initiatives.
- Ways to reduce the burden on practitioners while ensuring comprehensive care.
Conclusion
The proposed CMS policy on digital mental health treatment devices aims to leverage digital therapeutics to improve access to behavioral health services while maintaining rigorous standards for safety and effectiveness. The proposal recognizes the rapid evolution of digital health technologies and seeks to adapt Medicare policies accordingly, with significant input from stakeholders to refine and optimize these new coverage and payment policies. Public comments and further research will play crucial roles in shaping the final rules and ensuring they meet the needs of both practitioners and patients effectively. [/ End Chat GPT 4]
If you were the author of the MEDPAC report on CMS and software, written several months ago, how would you react to the new publication about mental health apps? Surprises? Or predictable?
[Note that in this answer, GPT 4 referred by hotlink either to the 0601 Medpac chapter or the 0710 PFS rule.]
If I were the author of the MedPAC report on CMS and software, written several months ago, my reaction to the new CMS publication on mental health apps would include several observations and reflections:
Reaction to the New CMS Proposal on Mental Health Apps
Surprises
Speed of Adoption: The swift move by CMS to propose specific codes and payments for digital mental health treatment (DMHT) devices might be seen as a surprise. The MedPAC report noted the evolving nature of software technologies and CMS's typically deliberate approach in covering new technologies.
Focused on Mental Health: The specific focus on mental health apps, particularly digital cognitive behavioral therapy (CBT) and other DMHT devices, indicates a rapid response to the growing need for mental health services, which may not have been anticipated in the broader discussion of software technologies in the MedPAC report.
Public Feedback Request: CMS's detailed solicitation for public comments on various aspects of the proposal, including FDA clearance, pricing variability, and usage limitations, shows an openness to stakeholder input that might not have been expected to this extent.
Predictable Aspects
Regulatory Alignment: The alignment with FDA regulations and the clear categorization of DMHT devices as requiring FDA clearance aligns well with MedPAC’s emphasis on regulatory compliance for software as a medical device (SaMD).
Complex Pricing and Payment Models: The challenges in setting appropriate pricing and payment models for software-driven technologies were anticipated. The MedPAC report highlighted similar concerns about payment methodologies and the need for a balanced approach between innovation and affordability.
Incremental Approach: The use of contractor pricing for the new codes and the proposal to potentially adopt new CPT codes in the future mirrors the incremental and cautious approach CMS has historically taken with new technologies.
Detailed Observations
Three New HCPCS Codes: The proposal to create three new HCPCS codes (GMBT1, GMBT2, GMBT3) for different aspects of DMHT services is a logical extension of CMS’s strategy to clearly define and separate different types of services for precise reimbursement. This aligns with the approach of categorizing software technologies under specific billing codes as discussed in the MedPAC report.
Contractor Pricing: Given the variability in costs and the evolving nature of digital therapeutics, CMS’s decision to use contractor pricing for GMBT1 is a prudent step to manage initial uncertainties in cost estimation, reflecting the cautious approach recommended in the MedPAC report.
Criteria for Payment: The detailed criteria for payment, including FDA clearance and the condition that the DMHT device must be integral to ongoing treatment, are consistent with the MedPAC report’s emphasis on ensuring that new technologies meet stringent safety, efficacy, and necessity criteria before being covered.
Public Comment on Pricing Methodology: The request for public input on pricing methodologies indicates CMS’s recognition of the complexities involved in pricing digital therapeutics, a concern that was thoroughly discussed in the MedPAC report. This step is crucial for developing a sustainable and fair payment system.
Conclusion
The new CMS proposal on mental health apps aligns well with the broader themes and concerns discussed in the MedPAC report, particularly in terms of regulatory alignment, incremental adoption, and the complexities of pricing. While there are some surprising elements, such as the rapid focus on mental health apps and the extensive solicitation of public feedback, these moves reflect an adaptive and responsive approach by CMS to the evolving landscape of digital health technologies.
