In its first proposed physician fee schedule rule of the second Trump administration, the Centers for Medicare and Medicaid Services (CMS) indicated that digital health technology, like telehealth and remote monitoring, have a role to play in the administration’s push to treat chronic disease.
CMS signaled its commitment to digital health and built upon recent positive indicators to the sector like the health tech request for information and Health Secretary Robert F. Kennedy Jr.’s pledge to advance the use of wearables in front of the Senate last month.
CMS worked within the bounds of its policy abilities to move forward incrementally with many telehealth, remote monitoring and digital therapeutics policies. Some of the wins included permanently allowing direct supervision via telehealth and removing frequency limits for telehealth visits in nursing homes and inpatient facilities.
The agency also offered a glimpse into its digital health philosophy in the rule.
“As technology advances and more services may be safely furnished via telehealth and paid under the PFS, it is increasingly important for physicians and other practitioners to exercise their professional judgment in determining the generally appropriate service modality for their patients to receive a service,” CMS said in the rule (PDF).
Digital health advocates have long pushed regulatory agencies to allow physicians to make individualized determinations on the best circumstances to use digital health tools in the provision of care.
CMS under Administrator Mehmet Oz, M.D., however, didn’t go all-out on digital health policy. It turned down several proposals and indicated it was gathering information on others, signaling a moderated approach.
Such was the case with digital mental health technologies (DMHTs), which were awarded new G codes last year. Oz’s CMS proposed to continue covering the technologies and add a new use case for Attention Deficit Hyperactivity Disorder. However, the agency rejected applications for gastrointestinal disorders, sleep conditions and fibromyalgia.
CMS said it is in the early stages of digital therapeutics policy .”We continue to aim to both provide access to vital behavioral health services and gather further information about the delivery of digital behavioral health therapies, their effectiveness, their adoption by practitioners,” the agency said.
Requests for information
Like in previous years, CMS requested information from stakeholders on payment issues and ideas. In one section, CMS asks stakeholders to provide feedback on appropriate payment strategies for software as a service and artificial intelligence.
CMS acknowledges that its current payment methodology is outdated for the evolving use of software to treat conditions and aid providers at the bedside. Stakeholders have taken issue with CMS continuing to categorize software as an indirect practice expense, which it has done historically to account for IT costs in healthcare.
The agency asks for alternative pricing strategies for SaaS and AI technologies, how it should value the physician work when providers use SaaS and AI, and how the technologies are used to treat chronic disease.
CMS also lays out a request for information (RFI) on the prevention and management of chronic disease, in line with President Donald Trump’s Make America Healthy Again executive order.
It signaled that digital therapeutics could play a role in MAHA and asked stakeholders to provide information on whether it should create separate coding and payment for FDA-cleared devices. CMS also asks how it could better pay for prevention and lifestyle interventions under the PFS, including medically tailored meals.
“[The Connected Health Initiative] is encouraged by the RFI focusing on prevention and management of chronic disease. CHI has long been advocating for the Medicare program to leverage the range of digital health tools and wearables available today that improve patient engagement in their own care and support preventative efforts. The CHI community is excited about the new focus on prevention and plans to provide detailed thoughts in our comments," the Connect Health Initiative said in a statement.
Telehealth
The CY2026 Medicare physician fee schedule includes several payment changes for telehealth services.
CMS proposes to simplify the process for adding new telehealth services to the Medicare Telehealth Services List. Starting in 2024, the Biden administration changed the process for adding services to the list with a five-step process. If new telehealth services checked the boxes in these five steps, CMS would categorize the services as permanent or provisional.
Trump’s CMS is proposing to reduce the number of steps in this process from five to three, citing the burden of the process. If the three-step process is finalized, CMS would also get rid of the permanent and provisional categories, the PFS says.
CMS proposes to add group behavioral counseling for obesity, multiple-family group psychotherapy and an infectious disease add-on code to the telehealth services list.
The agency also lays out two new permanent telehealth policies that are wins for stakeholders.
It proposes to permanently remove frequency limitations on certain subsequent nursing home and inpatient hospital telehealth visits. The frequency limitations required follow-up visits to be conducted in person after a certain number of telehealth visits. CMS found that providers rarely exceeded the frequency limitations for telehealth and proposed to remove the threshold.
Another win for medical practices came through direct supervision changes. Direct supervision could happen digitally. CMS proposed to define it as the immediate availability of the supervising practitioner via telehealth when non-physician providers bill services incident-to that practitioner. The proposed policy excludes audio-only.
Though direct supervision is a win for the telehealth community, CMS failed to further extend telehealth supervision for residents. CMS proposed to maintain the current status for residents and their supervisors, whereby they can conduct a three-way telehealth visit with the patient, resident and supervisor in separate locations or else the supervising physician must be physically present with the resident and patient.
CMS says the supervising provider cannot perform necessary oversight if they are in a remote location while the resident and patient are in person. CMS proposed an exception for rural areas.
"While there are important details to address before the final rule is issued, the Alliance commends CMS for its strong leadership in advancing the use of digital health to help practitioners tackle chronic disease, improve rural health access, and address other pressing health challenges facing the nation," Chris Adamec, executive director at the Alliance for Connected Care, told Fierce Healthcare.
CMS proposed to eliminate codes for social determinants of health risk assessment, including telehealth. CMS reasons that the assessment is already paid for under other codes.
CMS did not address the issue of home address reporting for Medicare telehealth providers.
"The CY 2026 Medicare Physician Fee Schedule (PFS) proposed rule reflects a strong, positive step forward for virtual care," Alexis Apple, head of federal policy at the American Telemedicine Association's advocacy arm, ATA Action, said in a statement. "As it stands, providers delivering telehealth from their homes may soon be required to list their personal home address on Medicare enrollment and billing forms unless this policy is extended or permanently addressed. This requirement, if left unchanged, poses significant security risks, administrative burdens, and operational costs—not only for providers, but also for hospitals, group practices, and CMS itself. "
CMS proposed to continue covering telehealth services for federally qualified health centers and rural health clinics under its existing payment policy.
Medicare Diabetes Prevention Program
In a win for virtual-only diabetes providers, CMS proposed to allow the Medicare Diabetes Prevention Program to be delivered fully online for the next three years, through December 2029.
Previously, CMS would only pay providers of MDPP if their services were conducted in person. Online providers are required to obtain an online organization code from the CDC prior to delivering online sessions for MDPP, CMS says.
“We propose adding coverage of the delivery of the set of MDPP services using the online modality during the online delivery period to test if outcomes, for MDPP beneficiaries, including weight loss, are similar to the in-person and distance learning delivery modalities.”
The proposed policy would not allow for the replacement of live health coach interactions with AI. CMS suggests the use of Bluetooth-connected weight scales for use in the program to directly transmit a beneficiary’s weight measurement to the MDPP provider.
Remote monitoring
CMS proposed new codes for remote physiologic monitoring and remote therapeutic monitoring consistent with the changes made by the American Medical Association’s coding committee last year.
CMS proposed new codes for the collection of two to 15 days’ worth of readings submitted by the patient to the provider. Previously, the threshold for payment was to submit physiologic data for more than half of the days in a month, or 16 days.
CMS also created a proposed code for less than 20 minutes of review of a patient’s physiologic data based on the AMA’s recommendation. CMS proposed mirrored codes for remote therapeutic monitoring.
“For the first time in years, we’re talking about a payment bump instead of a dramatic cut for the RPM codes,” CEO and founder of Cadence, Chris Altcheck, said in a message to Fierce Healthcare. “We’re also seeing the introduction of two new RPM codes and incremental APCM services. There’s work to do to make sure these investments are enduring, but we are pleased that CMS is sending a clear signal that it wants to drive adoption of value-based, tech-enabled care.”
CMS noted that many of the codes will have to be reviewed after 2026 data becomes available, because they did not meet minimum survey requirements for the January 2025 RUC meeting. It said all remote monitoring codes are expected to be reviewed in January 2028.
Digital Therapeutics
CMS expressed its support for digital therapeutics and digital mental health technologies in the proposed physician pay rule. The agency pointed to the technologies as a way to help relieve the shortage of behavioral health clinicians and tackle chronic disease.
CMs proposed to expand payments for DMHTs to include technologies for the treatment of Attention Deficit Hyperactivity Disorder (ADHD). It declined to cover DMHTs for GI disorders, sleep conditions and fibromyalgia, it said in the proposed rule.
CMS acknowledges that there has been limited uptake of the DMHT codes since their creation last year, in part because the codes may not align with direct-to-consumer payment models. To offset the issue, CMS said it may add a payment pathway for a broader category of digital tools.
“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,” CMS wrote. “Specifically, we are seeking information about clinical practice involving use of such tools.”
CMS declined to provide prices for the devices and said they will continue to be established by Medicare Administrative Contractors. Device makers and advocates have said that the MAC prices have been too low in the last year.