New Medicare codes and the first commercial coverage give FDA-cleared prescription digital therapeutics the reimbursement they always lacked, including for substance use disorder.
Key Takeaways
- Clearance was never the problem: Prescription digital therapeutics won FDA authorization years ago, and the flagship company still collapsed because almost no one paid for the product. The missing piece was reimbursement, not evidence.
- Medicare built the first payment pathway: The 2025 physician fee schedule created three billing codes for FDA-cleared digital mental health treatment, and the 2026 rule extended them. It is the precedent the industry spent years asking for.
- Commercial coverage has started to follow: A large national insurer began covering FDA-approved digital therapeutics in late 2025, the first meaningful move beyond Medicare. Whether other payers follow will decide the market.
- Substance use disorder is squarely in scope: The FDA category that anchors the new codes covers substance use and opioid use disorder, and the original SUD product now lives on under new ownership. The reimbursement question decides whether these tools scale.
The cautionary tale that hangs over digital medicine is the story of a company that did everything the regulatory system asked and failed anyway. Pear Therapeutics built the first prescription digital therapeutics to win authorization from the Food and Drug Administration, software programs that delivered cognitive behavioral therapy for substance use disorder and insomnia, backed by the kind of clinical trial data that pharmaceutical companies run for drugs. Pear had the clearances, the evidence, and the first-mover position. Yet, by April 2023, it filed for bankruptcy.
Pear’s collapse became the field’s defining object lesson: in American health care, FDA clearance means a product is safe and effective, and reimbursement means it exists. The two are not the same, and the gap between them is where digital therapeutics went to die. What has changed, quietly and consequentially, over the past two years is that the reimbursement half of the equation has finally started to fill in, first through Medicare and now at the edges of the commercial market, and the business case that Pear never got to test is being tested at last.
Why FDA Clearance Was Never Enough for Digital Therapeutics
A prescription digital therapeutic is a software product, usually an app, that delivers an established form of therapy, most often cognitive behavioral therapy, in a structured and clinically validated way, and that requires a clinician’s prescription. The FDA regulates the serious ones as medical devices, demanding evidence that the underlying therapeutic model is validated by clinical data, which is what separates them from the vast and unregulated field of wellness apps. That regulatory seriousness was supposed to be the industry’s advantage. It turned out to be an incomplete one.
Trouble was, the American payment system had no slot for the thing. A digital therapeutic is not a drug, so it does not move through the pharmacy benefit. It is not a clinician’s service, so it does not fit neatly into a professional fee. It is a prescribed product that sits in an uneasy space between categories, and for years payers responded to that ambiguity the way payers usually respond to ambiguity, by declining to pay. Companies could sell directly to health systems or employers one contract at a time, but the recurring, scalable reimbursement that sustains a medical product simply was not there. That absence is the same structural mismatch that has kept other genuinely effective behavioral health innovations from scaling, the recurring gap between what the evidence supports and what the payment system is built to fund.
The consequences were not confined to one company. The whole first generation of digital therapeutics companies, having raised money on the premise that FDA clearance would translate into prescriptions and payment, spent the years after Pear’s collapse retrenching, pivoting to cash-pay or employer models, or quietly folding. Investors who had treated the category as the next frontier of behavioral health grew wary, and the conventional wisdom hardened into a warning: a regulated medical product without a reimbursement code is a science project, not a company. That is the sentiment the past two years have started, tentatively, to revise.
How Medicare Built the First Digital Therapeutics Payment Pathway
The turn began with a technical decision inside a very long rule. In the 2025 Medicare Physician Fee Schedule, CMS established three new billing codes for digital mental health treatment, designated G0552, G0553, and G0554. The first covers the supply of an FDA-cleared device and the initial patient onboarding; the other two cover the monthly clinical work of managing a patient’s treatment through it, in twenty-minute increments. A provider can now, in effect, prescribe a digital therapeutic and bill Medicare for supplying and managing it, much as they would order and manage other treatment.
The framework matters more than the dollar amounts, which are modest, with the two management codes priced around twenty dollars each and the supply code left to regional contractors to value. What CMS did was build the slot that never existed, giving the category a legitimate place in the billing system for the first time. And it kept going. The 2026 fee schedule extended the payment policy and proposed widening it to cover devices for attention-deficit disorder, while the agency solicited comment on how to pay for a broader range of digital treatments in the future, including software that falls outside the current device pathway. The trajectory is unusually clear for Medicare rulemaking: the program is feeling its way toward paying for validated digital treatment as a standing category rather than a novelty.
Whether Commercial Payers Will Follow Medicare on Digital Therapeutics
Medicare alone does not make a market, especially for behavioral health tools whose users skew younger than the Medicare population, so the more important signal is whether commercial insurers follow. The first substantial one arrived in September 2025, when Cigna announced it would begin covering FDA-approved digital therapeutics, the first major national plan to move. Commercial coverage is what the industry has always needed, both for the revenue and because private payers frequently take their cues on novel categories from what CMS and the largest insurers decide to recognize.
Legislation could accelerate the shift or render it moot. The Access to Prescription Digital Therapeutics Act, which would create an explicit Medicare and Medicaid coverage pathway for FDA-cleared products, has been introduced in successive Congresses without passing, and its fate would determine whether reimbursement rests on durable statutory footing or on fee-schedule provisions that a future rule could narrow. For now the market is being built administratively, code by code and plan by plan, which is slower and less certain than a statute but is considerably more than the category had two years ago. It echoes the same question now facing other emerging behavioral health technologies seeking a foothold in clinical workflows: the tool works, and the open question is whether the payment system will carry it.
What Digital Therapeutics Reimbursement Means for SUD Providers
For substance use disorder providers specifically, this is not an abstract development, because SUD runs through the category’s history and its coverage. The FDA device classification that anchors the new Medicare codes explicitly encompasses substance use and opioid use disorder, and the original prescription digital therapeutic, Pear’s reSET and its opioid-focused companion reSET-O, were built for exactly this population before being sold out of bankruptcy to a digital treatment company that continues to operate them. The clinical rationale is strong, because digital delivery can extend contingency management and cognitive behavioral therapy to patients between appointments, in rural areas, and at hours no clinic keeps, filling gaps that a field too short-staffed to hire its way out of.
The strategic reading for operators is to treat this as a capability worth understanding now, while the reimbursement is young and the competitive field is thin, rather than after the payment pathways harden and the early positions are taken. A digital therapeutic is not a substitute for a counselor, and anyone selling it as one is overpromising in a way the field has seen before. But as an adjunct that a program can prescribe, bill for, and use to hold contact with patients across the long stretches between visits, it fits naturally alongside the integrated and collaborative care models that keep pulling behavioral health toward coordination. None of this guarantees the category’s success, and a reimbursement code is not the same as a thriving market: providers still have to build the product into their workflows, patients still have to use software that many abandon within weeks, and the payment rates remain thin enough that the economics are far from proven. The lesson of Pear is not that digital therapeutics do not work. It is that working was never the question. Getting paid was, and for the first time the answer is starting to be yes.
