Issue 250
Welcome back to E&O: SaMD, a paying subscribers-only weekly newsletter focused on the world of digital pharma products, prescription digital therapeutics and other FDA-regulated digital health.
E&O: Software as a Medical Device
A few quick things before we dig into the proposed Physician Fee Schedule, which CMS just posted this week (chock full of potential reimbursement changes for digital health) as well as the warning letter that the FDA just sent Whoop… but first…
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CMS posted its proposed Physician Fee Schedule for 2026 and it is full of possible reimbursement for digital health. This round-up will mostly focus on the agency’s tweaks to the G Codes for Digital Mental Health Treatment (DMHT) Devices as well as its proposal to allow online-only versions of the diabetes prevention program (like Omada Health’s) into the Medicare DPP program, which is something Omada has lobbied for annually for many, many years.
CMS admits that MDPP has not enrolled many people:
“The most recent MDPP evaluation report reflected that between April 2018 and September 2024, approximately 9,015 beneficiaries have participated in MDPP… Participation in MDPP has been low, with less than 1 percent of eligible beneficiaries participating in the program. While an estimated 9.3 million Medicare FFS beneficiaries are potentially eligible for the program (that is, have a prediabetes diagnosis but not a diabetes diagnosis in claims), fewer than 5,000 Medicare FFS beneficiaries have participated in MDPP during the first 6 years of the program. Increasing the uptake of MDPP among both suppliers and beneficiaries is necessary to increase the impact and success of the program.”
In a recent letter to CMS, Omada said that across all of its programs (not just diabetes prevention) it had cumulatively enrolled around 32,000 people in total who were over the age of 65. To drive more enrollment, CMS is proposing a few things, including:
“Finally, we are proposing to test the inclusion of an asynchronous delivery modality … which will allow MDPP suppliers to deliver the Set of MDPP services Online through December 31, 2029, clarify that MDPP suppliers are not required to maintain in-person delivery capability through December 31, 2029, and introduce a new G-code and payment for Online sessions.”
So, the CMS proposal is to test an asynchronous, online delivery modality of the program for four years, but it would be a start.
Next, let’s talk about the DMHT G Code changes, proposals, and comments. Longterm, CMS said it expects to expand the G Codes to include a broader array of digital health interventions beyond mental health in the coming years:
“We anticipate that updating our payment policies will be an iterative process relating first to behavioral health treatment and by extension to chronic conditions.”
Don’t expect CMS to include biofeedback-based devices in this set of codes, because Medicare coverage is explicitly limited on that front:
“We note that Medicare coverage of biofeedback is limited by a long-standing national coverage determination.”
The big news here is that CMS is formally proposing to expand the current group to include ADHD-focused digital therapeutics under the G Codes:
“We are proposing to expand our payment policies for HCPCS codes G0552, G0553, and G0554 to also make payment for DMHT devices cleared under section 510(k) of the FD&C Act or granted De Novo authorization by FDA and in each instance classified at § 882.5803 Digital therapy device for Attention Deficit Hyperactivity Disorder (ADHD).”
That’s relevant to Lumos Labs recently FDA-cleared Prismira as well as the assets Virtual Therapeutics acquired when it bought Akili. Small clarification about the G codes from CMS:
“We are clarifying here that the patient must have a mental health condition diagnosis, but the billing practitioner does not need to be the practitioner who made the diagnosis.”
CMS is asking whether it should next include coverage for FDA-cleared digital therapeutics focused on behavioral therapy for GI conditions, for sleep disturbance from psychiatric conditions, and for fibromyalgia. That sounds like potentially good news for whoever bought Mahana Therapeutics’ FDA-cleared asset for GI, NightWare, and Swing Therapeutics. Here is CMS’ exact language on that request for comments:
“Additionally, we welcome comments on whether we should establish coding and payment policies for devices classified under the following FDA regulation sections that were recommended to us by interested parties: Computerized behavioral therapy devices for treating symptoms of gastrointestinal conditions at § 876.5960; Digital therapy devices to reduce sleep disturbance for psychiatric conditions at § 882.5705; and Computerized behavioral therapy device for the treatment of fibromyalgia symptoms to be codified at § 882.5804.”
CMS confirms that providers have been slow to adopt the G Codes but the agency doesn’t seem to be discouraged by that:
“Medicare FFS claims data for HCPCS codes G0552, G0553, and G0554 have remained low in volume since we established these codes in the CY 2025 PFS final rule. We understand there may be several reasons for this. We are aware per interested parties and commenters that a condition of payment that we established for these codes, that the billing practitioner is incurring the cost of furnishing the DMHT device to the patient, may not align with direct to consumer delivery and payment models that existed before the final rule was issued.”
That said, CMS declined to set a national price for the supply code G0552, but hinted that they might in the future:
“At this time, we do not believe we can appropriately price all the DMHT devices for which we would make payment under our current policies and proposals, and therefore, we are not proposing any changes to the existing contractor-priced status for HCPCS code G0552. As we have noted, the technologies and DMHT therapies are evolving rapidly. We recognize our payment policy, too, will evolve. Given the dynamic nature of the development of these devices and the variation in methods of action for potential technology platforms, we do not have sufficient information needed to establish national pricing for devices described by HCPCS code G0552 at this time.”
The most surprising request for comments focused on CMS’ interest in creating another supply code (similar to G0552 but reimbursed at a lower price) that covers digital tools (that do not require FDA market authorization) but encourage a healthy lifestyle as part of a mental health treatment plan of care. Can’t wait to read the comments that CMS receives about this:
“We are seeking comments on the possibility of establishing for CY 2026 additional separate coding and payment for a broader based set of services describing digital tools used by practitioners intended for maintaining or encouraging a healthy lifestyle, as part of a mental health treatment plan of care. Specifically, we are seeking information about clinical practice involving use of such tools. On what reliable evidence do practitioners inform their clinical judgment that use of such digital tools is warranted or beneficial to their treatment of the patient? What role do these digital tools typically have within plans of behavioral health treatment? What appropriate crosswalks would we consider for the purposes of nationally pricing a code to describe digital tools that do not require FDA clearance, approval or authorization and therefore do not entail the development costs of FDA clearance, approval or authorization or meet other conditions of payment for HCPCS code G0552, primarily that the practitioner must bear the cost of the DMHT device as a supply incident to their services.”
Here’s more on why CMS says this code would need to be priced lower than G0552:
“Since the resource costs reflected in the practice expense should be lower for services involving digital tools that do not require FDA clearance, approval, or authorization or meet the condition of payment that the billing practitioner bears the cost of supplying the DMHT device for HCPCS code G0552, we anticipate that the corresponding valuation for any additional coding would be appropriately lower than G0552.”
Finally, it sounds like CMS is considering a new supply code that specifically describes Cognoa’s digital diagnostic aid for autism spectrum disorder, CanvasDx:
“We are seeking comments from the public regarding whether creating an add-on G code and contractor pricing is needed for the administration of an FDA authorized eye-tracking technology and other technology to aid in the diagnosis of ASD in pediatric patients; or whether it would be more appropriate to go through the CPT Editorial Panel process to obtain a Category III CPT code for this treatment.”
This seems like relevant background: E&O reported last week, the FDA recently granted a 510(k) clearance to Aktiia for its OTC Hilo wristworn blood pressure device. It is not yet making its wearable available in the US, but it will soon.
Well, 12 days later the FDA sent a warning letter to wearable maker Whoop that the blood pressure insights feature the company recently launched for its users is a medical device that requires the agency’s review and clearance. This shouldn’t have been a surprise to Whoop, which had already discussed the feature with the agency before it launched. The FDA summed up those interactions in the letter like so:
“At the conclusion of your firm’s calls with FDA, your firm indicated its intention to continue marketing BPI without appropriate FDA authorization despite FDA’s repeated assertions that BPI is a medical device and therefore requires FDA authorization to be legally marketed.”
On Linkedin, Whoop’s Founder and CEO Will Ahmed wrote a long post about the incident that insists the company’s blood pressure offering is a wellness product. Here’s a highlight:
“To be clear, Whoop supports the FDA’s right to regulate medical devices. We spent years getting FDA clearance for our ECG feature that detects AFib. That’s a medical device. We follow the rules. Blood Pressure Insights, however, isn’t a medical device. And we won’t let regulatory overreach dictate how people access their own health data… This isn’t just about Whoop. It’s about your right to understand your body and your health. It’s about giving Americans access to health and wellness data. We’ll fight this. Because the data can be measured accurately, and it belongs to you.”
Ahmed met with health secretary Robert F. Kennedy Jr. as recently as May along with other health tech startups that HHS described as “key to the mission” to Make America Health Again.
This situation reminds me both of 23andMe and Apple’s approaches to FDA regulation. 23andMe famously launched its first iteration of genetic lab tests without the FDA’s blessing.
23andMe received a warning letter from the FDA in 2013 and basically shut down the vast majority of its offering for two years while it slowly sought FDA clearances for (some of) its tests. It never offered as comprehensive a suite of services as it did in its early, pre-FDA days though.
At the same time, Apple was slowly courting the FDA as it secretly developed its Apple Watch. The company first held meetings with the agency in 2013. Before long it was meeting with the FDA to discuss ways it might tweak the 510(k) process so it worked better for secretive companies like Apple. During Trump’s first administration, Apple worked with the FDA to receive special treatment as the only participant in the agency’s Pre-Cert Pilot to secure a De Novo and 510(k) clearance via a pathway with its own set of new rules that the FDA piloted just with Apple. In the end, the FDA was able to show that it didn’t stifle innovation — it could work with Big Tech companies like Apple and regulate their software as a medical device.
I am curious to see how Whoop’s experience unfolds — does it have enough juice with the Trump administration to receive special treatment like Apple did? Or is it more likely to shutdown its part of its offering like 23andMe did to pursue FDA market authorization?
Click below for dedicated pages for each of those categories:
| Issue 250 | Digital health research from Brian Dolan |
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Welcome back to E&O: SaMD, a paying subscribers-only weekly newsletter focused on the world of digital pharma products, prescription digital therapeutics and other FDA-regulated digital health. |
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| A few quick things before we dig into the proposed Physician Fee Schedule, which CMS just posted this week (chock full of |
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