The healthcare industry is continuing to evolve with technological innovations that can provide clinicians with a more holistic view of their patient’s health and which we ultimately expect to  improve patient outcomes. Both telehealth and remote patient monitoring (RPM) have seen a significant increase in adoption over the last couple of years. As those technologies continue to see broader usage and become part of mainstream healthcare delivery, what’s next on the horizon for digital health technology? One very interesting category is digital therapeutics (DTx), which have seen an uptick in development, progress in regulation and early evidence of adoption and impact.

Despite consumer acceptance and approval of nearly 40 DTx products by the Food and Drug Administration for a variety of indications thus far, there are still many questions  and much to learn with regard to regulations, greater adoption and integration into the clinical workflow to improve patient care and outcomes using digital therapeutics. Let’s explore.

Clearly defining Digital Therapeutics (DTx)

DTx are evidence-based, clinically-validated software solutions and medical devices that directly support patients in the management of a health condition. DTx can drive interventions to prevent, manage or treat a medical disorder or disease and may consist of only software or software combined with a device or a drug. Solutions on the market are now addressing mental health conditions, obesity, heart disease, diabetes, asthma, chronic obstructive pulmonary disease (COPD), pain, post-traumatic stress disorder and other health concerns.

DTx are much different than the consumer wellness apps you can download on your phone. These solutions are developed and validated according to industry standards for clinical efficacy, usability and data security. They must be certified by regulatory bodies to support their claims regarding risk, efficacy and intended use, according to the DTx Alliance.

The market for DTx is also growing – going from an estimated $4.5 billion this year to a projected $17.7 billion in 2027. And as new solutions hit the market, there must be more certainty around how this new healthcare software is covered and reimbursed to ensure patients can get the most benefit.

The regulatory landscape of DTx solutions

With more DTx solutions in the pipeline, there is a growing body of evidence supporting the impact DTx can have on patient outcomes, patient engagement and cost. As mentioned above, DTx encompasses a diverse set of solutions from standalone software to software together with a physical medical device to software combined with a pharmaceutical. Clarity on the regulatory pathways and, importantly, a growing number of predicate devices that have been cleared by the FDA are paving the way for continued innovation in this space. The FDA Digital Health Center of Excellence provides tools such as the Digital Health Policy Navigator to help companies understand their regulatory pathways and implications of design decisions early on in development.

Several pilot programs have aimed to improve the regulatory pathway such as the FDA’s Digital Health Software Precertification (Pre-Cert) Program. This pilot program was designed to show how DTx solutions could be federally approved while reducing burdens on developers and ensuring real-world DTx safety, efficacy and performance. A report issued in September 2022 about the pilot program found that these digital technologies were beneficial to patients, but required a new regulatory paradigm that would necessitate legislative change to supplement the FDA’s authority.

2023 final PFS rule signals progress for DTx reimbursement

Another factor that will determine how fast providers adopt DTx is whether or not there is a pathway to reimbursement for using these technologies. In some cases, DTx may cost-effectively enhance clinical outcomes that impact quality measures or other value-based care payment models. However, much of the healthcare market is still reimbursed through fee-for-service payments and will rely on pathways such as Remote Therapeutic Monitoring (RTM) codes to cover the cost of using DTx.

The Centers for Medicare and Medicaid Services (CMS) recently released its final version of the Medicare Physician Fee Schedule for 2023, which included updates to policies around RTM reimbursement, originally introduced in 2022.The biggest impact from changes made in the 2023 PFS is  the declaration of “General Supervision for all RTM,” meaning the activity does not have to be performed directly by a physician.

RTM codescover the monitoring of non-physiologic data for respiratory and musculoskeletal systems, as well as cognitive behavioral therapy. This data may capture and represent outcomes such as therapy response and patient adherence related to treatment. With the 2023 changes, DTx and remote therapeutic monitoring (RTM) codes, which will now allow clinical staff to perform the activities of RTM, even if not present at the same physical location as the billing practitioner – which is in line with the current RPM and CCM codes.

The new Remote Therapeutic Monitoring CPT Codes in the Final 2023 Medicare Physician Fee Schedule are as follows:

• CPT code 98975: Initial Set-up and Patient Education
• CPT code 98976: Supply of Device for Monitoring Respiratory System
• CPT code 98977: Supply of Device for Monitoring Musculoskeletal System
• CPT code 989X6: Supply of Device for Cognitive Behavioral Therapy Monitoring
• CPT code 98980: Monitoring/Treatment Management Services, first 20 minutes
• CPT code 98981: Monitoring/Treatment Management Services, each additional 20 minutes

Delivering patient benefits through DTx

As regulatory processes and reimbursements are refined, there needs to be a continued focus on how to maximize the benefits for patients and ensure DTx can play a role in improving outcomes. The key to this is integration into the clinical workflow.

For a patient to get full benefits of the DTx, the data must be accessible to their provider and actionable within the workflow. It’s great if patients are using DTx solutions, but if we do not bring that data to their care providers – whether it’s a primary care doctor, specialist, physical or occupational therapist, psychologists or other healthcare practitioners — and in the context of other relevant clinical data from the EHR, we will not realize the full potential of the impact DTx can have on patient care. It is only through this ability to get these types of insights on a patient’s condition across the care continuum that healthcare providers can take the steps necessary to ensure that patients are getting the treatment they need and achieve the best outcomes possible.

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