7.11.25
< 1 min. Read
Digital mental health G code adoption “slow and challenging”
In this article:
Issue 249
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
Two quick things before we dig into the “slow and challenging” rollout of the new digital mental health G Codes, a slew of new FDA clearances, as well as the latest updates on digital health-related clinical trials… but first…
- Now that digital health IPOs seem like more of a possibility for later stage companies, E&O’s long-form reports on pre-IPO companies are ramping back up. I’ve seen plenty of lists of likely IPO hopefuls floating around, but which ones would you like to learn more about? Hit reply with your suggestions.
- Speaking of lists: The FDA compiled and posted a few new helpful lists of digital health-related FDA authorized medical devices. The agency put together one list focused on AR/VR devices and another focused on software-based devices that make use of wearables or sensors. The agency also updated its running list of AI-based medical devices here.
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Big Health tells CMS that provider adoption of the new HCPCS billing codes for digital mental health has been “slow and challenging”
Over the past few years, E&O has closely tracked Big Health’s pivot into prescription digital therapeutics. Now Big is hoping to convince CMS to refine its approach to reimbursing for its PDTs via the pathway the company helped create in the Physician Fee Schedule last year.
Quick background: Following the waivers that allowed it to make treatment claims during the pandemic, Big began pursuing FDA clearances for its flagship digital interventions. That effort resulted in SleepioRx and DaylightRx. As its FDA clearances drew near, Big attempted to create new CPT codes via the AMA but couldn’t get them through. As the CPT billing code applications started to look unsuccessful, the company then began to lobby CMS directly to create a new set of HCPCS G Codes focused on digital mental health interventions that followed Big Health’s preferred business model of selling the device to the prescriber, who then bills for it using the new supply code. Earlier this year E&O was the first to report that the G0552 supply code that Big Health helped CMS create was only being reimbursed by two MACs at around $129 — much lower than Big Health originally requested from CMS.
Big Health’s new letter to CMS: In June, Big Health wrote a letter that updates CMS on its progress with the new billing codes. Big was writing in response to the RFI CMS put out related to Medicare adoption of health tech. Big’s letter confirms E&O’s reporting and also tries to convince CMS to do what Big Health originally asked it to when it first created the codes — set national pricing because the MAC pricing so far is too low to be sustainable.
“While the establishment of this pathway is a critical first step, adoption of the technology has been slow and challenging as providers have faced a number of obstacles (detailed below) since January 1, 2025.”
It’s worth remembering that these codes have only been in effect this year, but six months in, it already seems like the codes backers are looking for big changes. Here are the three main obstacles that Big outlines for CMS in its latest letter to the agency:
“(1) No national payment rate or inadequate payment rate established for the DMHT device. While CMS established a code for reporting the furnishing of the device to the Medicare beneficiary (G0552), the Agency did not establish a national price. Rather, it deferred to the local Medicare Administrative Contractors (MAC) to set the payment rate. Unfortunately, more than 5 months after the services became eligible for reimbursement, the majority of MACs have not yet established or published a payment rate. For the MACs who did establish a rate, the provider reimbursement rate is less than 20% of the cost incurred by the practice for the device.”
What’s interesting here is that Big Health implies it is selling its digital interventions to providers for more than 5x what the MACs are reimbursing. That means providers are paying Big Health more than $695 for the supply of the prescription digital therapeutic — either SleepioRx or DaylightRx. In its original letters to CMS before the finalization of the HCPCS codes, Big Health indicated it wanted to charge $800 for the supply of the device so that may be what it is charging providers today.
“(2) Lack of understanding about these devices and actions taken by CMS. Engagement with the MACs by providers has shown that many of the MACs do not fully comprehend what CMS did in the final rule and why. As such, their communications with the providers seeking to access these devices when clinically appropriate for their patients seem to be inaccurate or inconsistent with what CMS was seeking to achieve with this policy change.”
This is an interesting request and I’m not sure how likely it is that CMS would pursue it. My understanding is that MACs have a lot of discretion here. As Big noted above, most of the MACs haven’t established a payment rate for the supply code so they have, in effect, ignored that these new codes exist. This isn’t a first — The MACs have ignored digital health related codes in the past too.
“(3) Lack of clear direction on how to access and seek reimbursement for these services. Due to the perceived lack of understanding or commitment to these DMHT devices, MACs are giving inconsistent or incomplete answers when asked by qualified providers. Many providers have decided to forego furnishing these critically important and clinically appropriate services to Medicare beneficiaries until these outstanding hurdles are removed.”
The implication here is that some providers who have prescribed (or attempted to prescribe) digital health interventions via these codes this year have since decided to stop because of the reimbursement situation. Big sent CMS two suggestions to help fix the obstacles above and help drive adoption of the new G Codes:
“To address these types of challenges for future digital technologies, we provide the following recommendations:
(1) Establish national pricing reflective of the costs from the onset. The challenges that we are experiencing specific to carrier pricing are not new but rather, they are consistent the experiences those of other companies and stakeholders whose services have been subject to carrier pricing. CMS has the authority to set national rates for any new code(s) so we strongly encourage CMS to set appropriate rates, taking into consideration feedback from the innovators of these types of technologies.
(2) Detailed communication with the MACs. While CMS may address policy changes at a high level in their quarterly transmittals to the MACs, we strongly recommend more detailed engagement and communication to the MACs when implementing a policy such as the one finalized for January 1, 2025. The additional communication will give the MACs more insight into the Agency’s considerations behind and objectives for the new policy. Overall, it will be critically important that the Agency not only establish the policies for the adoption of digital technologies and health apps but also take the next steps post-policy effective date to ensure that the policy translates into actual access by Medicare beneficiaries to these important technologies and innovations.”
How likely is it that CMS will agree to either of those?
FDA clearances and clinical trial updates: Apple, Aktiia, Otsuka, Happy Health, Lumos Labs, Oui Therapeutics, BehaVR, and CognifiSense
In recent weeks the FDA has granted 510(k) clearances to a number of SaMDs and other digital health-related medical devices. Here’s a quick round-up:
Apple gets an OTC clearance for its Digital Prism Correction Feature (DPCF) for Apple Vision Pro users: This new 510(k) is for an OTC version of the device that is otherwise identical to its predicate, the earlier Rx-only version of the DPCF for Apple Vision Pro users. Here is the intended use, which is (nearly) identical for both devices:
“The Digital Prism Correction Feature (DPCF) is software that is intended to provide digital image adjustments in Apple Vision Pro in accordance with a user’s prism prescription. DPCF is available over-the-counter (OTC) for users with prism in their eyeglass prescription. When a prescription also includes other parts (e.g., sphere, cylinder, ADD), which can be fulfilled by optical inserts, the DPCF fulfills the prism part of the prescription while using Apple Vision Pro. DPCF supports prism prescriptions up to 7.75 Prism Diopters (PD) in the horizontal and/or vertical dimension (i.e., base-up, base-down, base-in, base-out), per eye.”
Otsuka gets a new 510(k) for the ingestible sensor, wearable patch, and app that it originally acquired from Proteus Digital Health years ago: The FDA granted a new 510(k) clearance for the Otsuka Digital Feedback Device. The ingestible sensor was unchanged but the new patch, called the D-Tect patch, replaces the original one used by Proteus. According to Otsuka’s study protocol:
“The D-Tect Patch was designed to be thinner, more flexible, and contain less adhesive than predecessor patches.”
The app used as part of the digital feedback system was also improved in a few ways, including how it counts steps.
Aktiia gets 510(k) for cuffless blood pressure measurement: The FDA hasn’t posted a summary document for this one yet, but the company did mention the recent clearance on a landing page on its website. It is not yet making its wearable available in the US, but it will soon. Aktiia, which recently rebranded to Hilo, makes a wristworn blood pressure monitor. Its pitch to potential buyers in the UK:
“Your Hilo Band takes ~25 measurements around the clock. You’ll see how stress, meals, medications, activity, and time of day impact your blood pressure. Use these insights to empower yourself, take action, and improve your health.”
Happy Health, the wearable ring company from the founder of Tinder, secured its second 510(k) recently. E&O was the first to report on Happy’s first 510(k) for its wearable last October. The second clearance is for a sleep apnea home test. Here’s how Happy described it in a recent announcement:
“Through the company’s Happy Sleep platform, individuals order a sleep test online, wear the ring overnight, and review the results with a board-certified sleep physician – all in the comfort of their own home. During the visit, patients create an individualized treatment plan with their provider—ranging from gold-standard CPAP to PAP-alternative dental appliances and the newest FDA-approved GLP-1 therapies such as Zepbound—so patients move from testing to the right solution without ever leaving home. These services are covered by most major U.S. insurers.”
More details on Lumos Labs’s 510(k) for a prescription digital therapeutic that is similar to Akili’s EndeavorRx: I’ve already reported on this clearance but now that the summary document is out, we know that Prismira, Lumos Labs’ answer to Akili’s EndeavorRx is a prescription-only device. (The company had previously indicated it preferred an OTC clearance but that it was ultimately up to the FDA.) In light of that, I’d guess Lumos will work toward an OTC clearance next just like Akili did for EndeavorOTC. It’s also interesting that Prismira is indicated for adults aged 22-55. Akili’s original PDT was for children. Many more details here.
New details and end dates for Oui Therapeutics’ PTSD PDT feasibility study
I’ve previously reported on a digital therapeutic intervention that Oui Therapeutics is developing for PTSD. This study compares two versions of the PDT — one has an “increased dose” of the mechanism of action. The company is not yet recruiting but it expected to start the study at the end of June — so it likely is enrolling now or soon. It anticipates about 40 participants. More:
“The purpose of this study is to conduct a randomized controlled trial to evaluate the usability and feasibility as well as the safety and effectiveness of OTX-601 (version 1) + TAU compared to OTX-601 (version 2) + TAU in reducing PTSD symptoms from baseline to 7 weeks.”
New CognifiSense for VR-based therapy for adults with chronic lower back pain
This study was first posted in the spring but it recently began recruiting. CognifiSense is developing a digital therapeutic for chronic lower back pain that it intends to submit to the FDA for clearance. Here’s more on the study:
“After the baseline period, participants are randomized into a treatment group (“Therapy Group”) or a control intervention group (“Control Group”) with a ratio of 1:1 (treatment:control). Both groups receive education on pain neuroscience and complete training on the use of the VR hardware and software. Next, both groups complete an intervention for 8 weeks (“Treatment Period”), after which they return the VR equipment. Several surveys are administered online during the Treatment Period. After the Treatment Period, both groups complete three post-treatment surveys at weeks 8, 20, and 32.”
No longer recruiting: BehaVR study on VR intervention for opioid use disorder
BehaVR, which merged with a few other companies under the new corporate name RealizedCare, is no longer recruiting for its VR-based digital therapeutic for OUD study. More:
“The goal of this clinical trial is to examine the usefulness of a virtual reality-delivered intervention for individuals with opioid use disorder who are taking medication. The main question it aims to answer is will people with opioid use disorder who receive the study intervention, Mindfulness-Oriented Recovery Enhancement in Virtual Reality (MORE-VR), have fewer days in which they use opioids than will people who just receive their usual treatment. Participants will be randomly assigned to either receive 8 weekly sessions of MORE-VR in addition to their usual treatment, or treatment as usual only. Researchers will compare these groups at the end of treatment and three months after treatment is over on number of days of opioid use and time until first opioid use lapse, as well as drug craving and mood.”
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And so ends Issue 249 of E&O: Software as a Medical Device. If you learned something from today’s issue, help me out and forward this newsletter to a friend or two.
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