9.05.25
6 min. Read

Letters to CMS: DMHT codes, MDPP pricing, more. Plus: Unannounced funding.

Issue 345

Welcome back to E&O: a paying subscribers-only weekly newsletter focused on three areas of health tech: FDA-regulated software devices, digital health as an employee benefit, and national virtual clinics.

 Exits & Outcomes Newsletter

 


Here’s a quick rundown of a bunch of (mostly) unannounced funding rounds plus one clinical trial update. Read on before we dig into some new comments on the proposed CMS Physician Fee Schedule for 2026….

  • XO Health, which offers a value-based care and benefits platform to self-insured employers, quietly raised $52.2 million. The company launched in January and already has deals with Decent and S&S Healthcare. No details on the unannounced funding yet but the launch announcement from earlier this year has more on the company.
  • Daymark Health, which provides “in-home and virtual supportive and wraparound care to patients with cancer in collaboration with their own oncologists,” quietly raised $20 million (plus $6 million in converted debt).
  • Germany-based Elea, which is building an AI-powered operating system for pathology, quietly raised $9 million.
  • Backpack Health, a virtual clinic focused on pediatric, individual and family mental health, quietly raised $2.8 million. It currently operates in four states: MD, VA, GA and MI.
  • NightWare, which offers an FDA-cleared prescription digital therapeutic for nightmare disorder associated with PTSD, quietly raised $1.1 million in a mix of equity and options.
  • STAT News already beat me to the scoop that Swing Therapeutics quietly raised about $11.4 million in new funding. STAT also reported (and I hadn’t noticed) that Pear Therapeutics founder and former CEO Corey McMann is now on Swing’s board.
  • Boehringer Ingelheim is finished recruiting participants for its next CT-155 clinical trial. The title of the trial, which focuses on a prescription digital therapeutic co-created with Click Therapeutics, contains most of the relevant details: “A Multicenter, Pragmatic Study to Evaluate Clinical Effectiveness, Engagement With the Study App, Healthcare Resource Utilization, and Safety of an Investigational Digital Therapeutic (CT-155) in Patients With Experiential Negative Symptoms of Schizophrenia.” BI expected to enroll about 250 participants originally.

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Industry comments on CMS Physician Fee Schedule proposals for 2026: Digital mental health treatment devices, health coaching, diabetes prevention programs, and more

Here is the latest installment of E&O’s round-up of comment letters to CMS in reaction to the agency’s proposed Phsyician Fee Schedule for 2026. (I expect to write just one more of these since the comment period ends in about a week.) Read on for lengthy comments from the American Telemedicine Association, a GI provider, and health coaching company YourCoach Health.

ATA: Expand DMHT codes but use this roadmap for reimbursement rates. Pay more for RTM and RPM. Pay more for online MDPP than proposed.

ATA encouraged CMS to expand the list of supply codes for the digital mental health treatment suite of codes by adding one for ADHD as well as ones focused on gastrointestinal health, fibromyalgia, and migraines. And it wants CMS to keep going:

“These additions are critical, as they reflect the growing clinical evidence supporting the effectiveness of DTx across a broader range of chronic and comorbid conditions. ATA Action strongly supports these proposed expansions and urges CMS to continue broadening the list of eligible conditions to reflect both clinical need and innovation in the digital health space.”

ATA also outlined a roadmap for CMS to continue to expand the codes while also tweaking how it pays them:

“Due to the variability between devices, many of our members would prefer to see codes specific to each device rather than by device classification. We understand such an approach may not be viable at this point, ATA Action recommends CMS consider multiple pathways to improve DMHT code valuation.”

In the near term, we strongly urge CMS to create new supply codes for the four additional FDA device classifications discussed above and that the Agency consider modifiers for such codes if necessary to distinguish between mental health conditions treated by the same device class to allow for more specific analyses of treatments and pricing.”

In the longer term, ATA Action urges CMS to pursue a structure of differential pricing primarily by therapeutic indication, consistent with regulatory and clinical practice frameworks. While recognizing that variation in complexity and return on investment can exist within indications, indication-based categorization provides a transparent and practical foundation. Within each indication, CMS may incorporate secondary adjustments to reflect substantial differences in development complexity, evidence base, or treatment models, thus balancing clarity and flexibility while avoiding overly burdensome complexity metrics.”

ATA also weighed in on the current plight of the existing supply code for DMHTs, which has languished under MAC pricing:

“Unfortunately, the MAC pricing process has been slow, and the MACs are questioning DMHT coverage. Furthermore, there are concerns about fair and accurate pricing for DMHT devices which seem to be driven by a continued lack of understanding between various types of technologies (e.g. unregulated wellness apps, remote monitoring devices, and DTx) and when DMHT use is clinically indicated. The MACs do not seem to appreciate that DMHTs deliver clinically validated cognitive behavioral therapy (CBT), and thus treatment using a DMHT device would be clinically indicated in the same circumstances as other forms of CBT.”

ATA goes on to suggest CMS give the MACs more explicit guidance around the codes:

  • “Explain to the MACs the rationale for coverage of specific FDA classifications of devices (e.g. what is required to meet special control requirements) and what level of clinical evidence review is appropriate in light of the specific controls required by FDA and the relatively low level of risk posed by DMHTs as Class II devices;
  • Instruct the MACs to use DMHT device invoices reflecting the cost to physician practices for purposes of establishing fair and accurate DMHT device pricing;
  • Direct the MACs to communicate the documentation required for G0552 device coverage; and
  • Instruct the MACs to develop a timely and transparent process for G0552 device claims review.”

ATA was supportive of CMS finally agreeing to pay for online delivery of the Medicare Diabetes Prevention Program, which has largely excluded digital health companies like Omada Health from traditional Medicare reimbursement. However, ATA suggested CMS rethink its plans to pay a lower rate for online delivery of MDPP:

“CMS should ensure that the MDPP payment model for online delivery accurately reflects the real costs of providing the program. Although virtual care has the potential to improve outcomes at lower overall cost, online providers still face significant upfront expenses, such as technology platform costs and supplying each participant with a medical-grade, cellular-enabled weight scale so that beneficiaries can track their weight reliably at home. We strongly encourage CMS to further evaluate the costs to MDPP providers and establish fair and accurate payment for MDPP services.”

ATA’s letter covered many other topics but I’ll mention just one other that E&O has been tracking for years. ATA asked CMS to pay higher rates for RTM and RPM:

“RTM and RPM treatment management codes remain significantly undervalued compared to similar services like Chronic Care Management (CCM), which have received appropriate upward adjustments. To ensure continued access to high-quality care and support the long-term viability of remote monitoring, we urge CMS to update these code valuations accordingly and ideally align RTM and RPM reimbursement rates with those of CCM, given the comparable time, complexity, and value involved in delivering these services.”

A gastroenterology provider from Summit Health in Oregon wrote CMS to ask them to expand the DMHT codes to include a new supply code for computerized behavioral therapy device for treating symptoms of gastrointestinal conditions:

“As a board-certified gastroenterology provider, I urge CMS to expand Medicare’s Digital Mental Health Treatment (DMHT) payment policy to include FDA-cleared devices classified under 21 CFR 876.5960: Computerized behavioral therapy device for treating symptoms of gastrointestinal conditions. IBS affects 4 to 5 percent of the US population, and guidelines currently recommend GI behavioral therapy to improve IBS patient symptoms and quality of life. However, Medicare beneficiaries cannot access these therapies due to severe workforce shortages — only a few hundred providers nationwide are trained to deliver these treatments. FDA-cleared digital therapeutics under §876.5960 deliver the same evidence-based interventions in a scalable, accessible format.”

YourCoach Health, which tells CMS it powers “digital health companies, health plans, health systems, and employers through a white-label platform… [that includes] 4,000+ coaches,” asked the agency to established permanent G Codes for health coaching:

“Health coaching, which includes but is not limited to motivational interviewing, has strong evidence of improving both medical and behavioral outcomes and therefore we recommend that CMS should:

  • Move health coaching T-codes (0591T–0593T) to permanent G-codes
  • Allow incident-to billing for health coaches under general supervision
  • Ensure codes explicitly capture prevention, caregiver support, social isolation, and physical activity interventions
  • Permit delivery via telehealth to increase accessibility and equity”

Links to E&O’s reports, databases, newsletters

Click below for dedicated pages for each of those categories:

  • Read through the long-form E&O research reports here.
  • Search and sort the E&O databases here.
  • Revisit hundreds of past issues of E&O newsletters here.
And so ends Issue 345 of the Exits & Outcomes Newsletter If you learned something from today’s issue, help me out and forward this newsletter to a friend or two.
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