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Breaking News: Updates on Digital Medicine Coding and Payment

Over the past several months, we have been following the activities of the American Medical Association (AMA) and the Centers for Medicare and Medicaid Services (CMS) regarding coding and payment, respectively, for digital medicine products. Both organizations made significant steps forward in the past few weeks to include some of these innovative products in the medical reimbursement stream. Here is the latest news and our analysis.

Cognitive Behavioral Therapy (CBT) Applications

Many digital therapeutics are designed to deliver a digitized form of condition-specific cognitive behavioral therapy (CBT) for adjunctive treatment of a variety of conditions. The Digital Therapeutics Alliance (DTA), AdvaMed, and others have made considerable efforts to create payment pathways for these types of products.

The AMA manages the procedure code set known as Current Procedural Terminology (CPT®), which identifies services and procedures rendered by practitioners and facilities. The CPT Editorial Panel makes decisions on new and revised codes as needs for coding change. As we anticipated, the panel accepted the use of temporary codes to identify supplying a device, reporting and interpretation of CBT applications. We list these temporary codes listed in the table below. The temporary codes will be replaced in January 2023 and combined into a single permanent CPT code, 989X6, with the “X” to be determined.

New Codes for Digital CBT

CPT Code Description
0702T Remote therapeutic monitoring of a standardized online digital cognitive behavioral therapy program ordered by a physician or other qualified health care professional; supply and technical support, per 30 days
0703T Management services by physician or other qualified health care professional, per calendar month

CMS administers multiple payment systems for Medicare, and has allowed for payment, effective January 1, 2022, for the use of Digital CBT based on the above action from AMA. Because the temporary codes do not have relative values assigned to them by AMA (which would usually happen with permanent codes), CMS has delegated the local Medicare Administrative Contractors (MACs) to assign payment amounts for claims from physicians and other individual practitioners on a claim-by-claim basis. For these services provided in the hospital outpatient department to Medicare patients, CMS will pay a national average amount of $38.03 for CPT Code 0702T, and no payment for physician management services (0703T) as it would not be considered a hospital service.

It is important to note that these payments are only for services rendered to Medicare beneficiaries. Commercial, or private, insurance may also use these codes and determine their own payment rates for the provision of these services.

Our Analysis: The Downside to CBT Applications

These temporary codes, 0702T and 0703T, can only be billed by healthcare professionals for their time monitoring a patient who is prescribed a Digital CBT application. This coding does not apply as a direct payment to digital health manufacturers, so payment to these innovators will likely be outside of the reimbursement stream. Medicare hospital outpatient payment of $38.03 per month is lower than the monthly price manufacturers seek for their digital therapeutics; we anticipate the payment to HCPs, decided on a per-claim basis by each local Medicare contractor, will be similar to the hospital outpatient payment. Therefore, these codes may encourage physicians to prescribe and review a patient’s progress on a Digital CBT application, but the payment amounts are not likely high enough to support business-to-business sales to providers.

In addition, several CPT coding topics did not make it through the September CPT Editorial Panel meeting. The proposed codes for digital pain management through augmented reality and for an automated cognitive health assessment were withdrawn by the applicants. The panel also rejected proposed codes for digital behavioral health interventions through multifunction devices, as well as for adding new patients to online evaluation and management codes. However, the CBT codes that were approved seems to mitigate the rejection of the proposed device code.

A Predictable Outcome

On Friday, November 12, CMS issued the Final Rule, rescinding the Medicare Coverage of Innovative Technologies (MCIT) program. Based on the September proposed rule, this action was not surprising and confirmed that companies should pursue coverage through the traditional channels they would have followed without MCIT in place.

CMS made a couple of points that may give the industry some hope, but further action will likely span a couple of years. In the final rule, CMS stated that it does not intend to maintain the status quo of coverage for innovative devices. The agency announced that there will be two stakeholder public meetings during 2022 to discuss the potential for expedited coverage for innovative medical devices. The final rule also revealed that CMS has engaged with the U.S. Agency for Healthcare Research and Quality to review the Coverage with Evidence Development Program and to review how to accelerate the National Coverage Determination process. Finally, and of note to digital medicine, the Final Rule included language to consider prescription digital therapeutics in initiating “several coverage process improvements.”

EVERSANA’s digital health team has worked on numerous products in the space, and we would be happy to talk with you about a reimbursement strategy for your product. Please contact us here.

Brian Abraham
Senior Director,​ Market Access & Patient Services

Brian Abraham, Director of Revenue Management Solutions at EVERSANA™, helps medical technology and biopharma companies develop and execute strategies around coding, coverage and payment for innovative medical technology products. He has 20 years of…

Martin Culjat, PhD
Senior Vice President, Global Head of Digital Medicine & Regulatory Innovation

Marty Culjat, PhD is the SVP, Global Head of Digital Medicine & Regulatory Innovation at EVERSANA. In this role, he leads a cross-functional team supporting the commercialization of digital medicine products within companies ranging…