The bill creates a statutory category—“prescription digital therapeutics” (PDxTs)—and requires Medicare Part B and Medicaid to cover them. It ties the definition to FDA clearance or approval (specific pathways are listed) and to prescription-device regulatory status, then instructs HHS/CMS to build payment, coding, and reporting infrastructure for these products.
Why it matters: this is the first comprehensive, device-style reimbursement framework in the bill for software-driven prescription therapies at the federal payer level. It both clears a path for manufacturers to seek federal coverage and creates new compliance and reporting obligations that will shape pricing, coding, and market transparency for DTx products.
At a Glance
What It Does
Defines “prescription digital therapeutic” by FDA regulatory status and device labeling, adds PDxTs to Medicare’s definition of medical/other health services, and directs CMS to set a Part B payment methodology and HCPCS codes. It also requires manufacturers to report private-payor rates, volumes, and user counts and adds PDxTs to the Medicaid benefit list.
Who It Affects
Digital therapeutics manufacturers and device makers that pursue FDA clearance/approval, Medicare Part B billers and program administrators, state Medicaid programs, and private payors whose prices and volumes must be reported. Clinicians who prescribe prescription-only digital therapeutics will also be affected by billing and coding changes.
Why It Matters
The bill institutionalizes federal coverage and a pricing process for prescription DTx, which can accelerate clinical adoption and investment while creating a federal data stream on commercial prices and utilization that CMS will use to set public payments.
More articles like this one.
A weekly email with all the latest developments on this topic.
What This Bill Actually Does
The bill builds a federal reimbursement framework for software-based prescription therapies by amending Medicare and Medicaid statutes. It creates a new statutory definition that requires an FDA clearance or approval pathway (the bill lists 510(k), 513(f)(2), and 515) and that the product function primarily through software and be a prescription device under existing FDA labeling rules.
That definition is the gatekeeper: coverage under the bill applies only to products meeting those regulatory criteria.
For Medicare, the bill adds prescription digital therapeutics to the statutory list of items and services payable as medical or other health services and inserts a new Part B section directing CMS to design payment rules. CMS must adopt a payment methodology within one year of enactment and may choose either a single upfront payment or recurring payments for products that require ongoing use.
When setting payments, CMS must consider the product’s initial public list charge, a weighted median of reported private-payor rates (weighted by volume across payors and manufacturers), amounts for ongoing use when relevant, and other factors the agency deems appropriate.The bill also requires CMS to create product-specific HCPCS codes within two years; until then, CMS must use temporary product-specific codes so payments can flow. To populate the weighted-median price calculation and inform payment-setting, manufacturers must submit an annual report beginning January 1, 2026, showing the private-payor payment rate (net of discounts and rebates), distribution volume to each payor, and the number of individual users.
The bill attaches a civil monetary penalty—up to $10,000 per day—to false or missing reports and treats reported information with the same confidentiality protections that apply to drug-pricing disclosures under section 1927(b)(3)(D).On the Medicaid side, the bill inserts prescription digital therapeutics into the statutory list of covered items and services in section 1905(a), making them part of the services subject to medical assistance. The amendments leave implementation details—such as state-level payment rates, utilization management, and any necessary state plan amendments—to existing Medicaid processes, but the statutory inclusion creates a federal coverage baseline.
The Five Things You Need to Know
The bill defines “prescription digital therapeutic” as a prescription device that primarily uses software and is cleared or approved under FDA pathways specified in the statute (510(k), 513(f)(2), or 515).
CMS must establish a Part B payment methodology within 1 year and may use either a one-time payment or recurring payments for ongoing-use products.
CMS must assign product-specific HCPCS codes within 2 years and provide temporary product-specific HCPCS codes immediately to allow payment until permanent codes exist.
Manufacturers must annually report, beginning January 1, 2026, each private payor’s net payment rate for the product, distribution volume to each payor, and the number of individual users; reported payment rates must reflect all price concessions.
Failure to report or misreport triggers civil monetary penalties up to $10,000 per day, and submitted data receive confidentiality treatment analogous to drug-pricing disclosures under section 1927(b)(3)(D).
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Short title
Establishes the Act’s name: the Access to Prescription Digital Therapeutics Act of 2025. This is mechanical but signals the bill’s concentrated policy goal: bringing prescription digital therapeutics into federal coverage rules.
Statutory definition of prescription digital therapeutic
Adds a precise, regulatory-focused definition to the Social Security Act that ties eligibility for coverage to FDA clearance/approval (the bill lists 510(k), 513(f)(2), and 515) and to being a prescription device under 21 C.F.R. 801.109. Practically, this limits the universe to products that pursued formal device review and are designated prescription-only; consumer wellness apps or unregulated software would not qualify under this definition.
Explicit Medicare coverage classification
Inserts prescription digital therapeutics into the statute’s catalog of medical and other health services payable under Medicare, making them part of the Part B benefit package when furnished on or after January 1, 2026. That change creates the legal hook for CMS to pay for PDxTs as medical services rather than treating them as drugs or purely ancillary products.
Payment, coding, and manufacturer reporting framework for Medicare Part B
This is the operational core: CMS must establish a payment methodology within 1 year and consider set factors (actual list charge, a weighted median of reported private-payor rates weighted by volume, and amounts for ongoing use). CMS must create permanent product-specific HCPCS codes within 2 years and provide temporary product-specific codes immediately so payments can be made. Manufacturers must report annually on private-payor payment rates (net of concessions), volumes to each payor, and user counts; failures or misrepresentations can trigger civil monetary penalties up to $10,000 per day. The section also defines terms used in the payment and reporting requirements and treats reported data with statutory confidentiality protections similar to those for drug-pricing data.
Medicaid inclusion of prescription digital therapeutics
Inserts prescription digital therapeutics into the list of services at section 1905(a). That placement makes PDxTs part of the enumerated items and services subject to medical assistance and means states must consider them within their Medicaid program rules; implementation still depends on state procedures, but the statutory inclusion removes an immediate legal barrier to Medicaid coverage.
This bill is one of many.
Codify tracks hundreds of bills on Healthcare across all five countries.
Explore Healthcare in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Medicare and Medicaid beneficiaries with qualifying conditions — they gain a clearer path to covered access for FDA-cleared prescription DTx that would previously have depended on discretionary coverage decisions.
- Manufacturers of regulated digital therapeutics — they obtain a defined federal reimbursement pathway, HCPCS codes, and a timetable for payment development, reducing commercial uncertainty when negotiating with payors.
- Health systems and prescribing clinicians — clearer coding, coverage, and payment increase the likelihood that DTx prescriptions can be billed and reimbursed, integrating these products into care pathways.
- Investors and digital health entrepreneurs — federal coverage signals market viability and may accelerate capital deployment into regulated DTx that meet the statutory gates.
- Policy and research communities — the mandated manufacturer reporting creates a new, consistent source of data on private-payor prices, distribution volumes, and user counts useful for market analysis and policy evaluation.
Who Bears the Cost
- Manufacturers — they must build processes to collect and report net private-payor rates, volumes, and user counts, and face steep civil monetary penalties for noncompliance; reporting also risks revealing commercial pricing strategy despite confidentiality rules.
- CMS and HHS — the agencies must design and operationalize a payment methodology, temporary and permanent HCPCS coding systems, and enforcement processes within tight statutory timelines, requiring staff and systems resources.
- State Medicaid programs — the statutory inclusion increases the scope of potentially mandatory benefits to administer and pay for; states will face operational and budgetary decisions when integrating PDxTs into their programs.
- Private payors — their negotiated rates and volumes become inputs to CMS’s payment-setting process and must be disclosed by manufacturers, which may affect market leverage and competitive dynamics.
- Clinicians and provider billing offices — they will need to adapt workflows to new HCPCS codes, potential new billing rules for recurring vs one-time payments, and documentation requirements.
Key Issues
The Core Tension
The central tension is between widening patient access to regulated software-based therapies by creating a clear federal reimbursement pathway and protecting program integrity and fiscal stewardship: advancing coverage and commercial viability requires predictable payments and market data, but those same features risk inflating program spending, expose confidential commercial information, and impose compliance burdens that could slow innovation or be gamed by market actors.
The bill carefully ties coverage to FDA-regulated, prescription-only devices, but it leaves several operational questions open. It does not specify how CMS should treat multi-component products that combine hardware, clinician-delivered services, and software subscriptions; deciding whether to bundle payments or split them across codes will be a consequential implementation choice.
The payment methodology directives (consider list price, a weighted median of private-payor rates, and ongoing-use amounts) provide inputs but leave substantial discretion to CMS, which creates uncertainty about whether CMS payments will reflect clinical value or default to commercial market rates.
The manufacturer reporting regime creates valuable transparency but also creates gaming and confidentiality risks. Manufacturers might structure contracts, rebates, or channel flows to influence the weighted-median calculation; the statute requires reporting of net rates but protects submitted data under drug-pricing confidentiality analogues, which limits public oversight of how CMS derives public payments.
Enforcement relies on civil monetary penalties up to $10,000 per day, but CMS’s practical ability to audit, detect underreporting, and litigate may be resource-limited. Finally, the two-year HCPCS timetable could delay the launch of permanent billing codes for complex products, and the temporary-code mechanism is necessary but may not resolve all operational billing difficulties (e.g., clinician modifier guidance, claims adjudication for recurring charges).
Try it yourself.
Ask a question in plain English, or pick a topic below. Results in seconds.