Coverage and payment of prescription digital therapeutics under the Medicare program

(a)

Prescription digital therapeutic defined

Section 1861 of the Social Security Act (42 U.S.C. 1395x) is amended by adding at the end the following new subsection:

(nnn)

Prescription digital therapeutic

The term prescription digital therapeutic means a product, device, internet application, or other technology that—(1)is cleared or approved under section 510(k), 513(f)(2), or 515 of the Federal Food, Drug, and Cosmetic Act;(2)has a cleared or approved indication for the prevention, management, or treatment of a medical disease, condition, or disorder;(3)primarily uses software to achieve its intended result; and(4)is a device that is exempt from section 502(f)(1) of the Federal Food, Drug, and Cosmetic Act under section 801.109 of title 21 of the Code of Federal Regulations (or any successor regulation).

(b)

Coverage as medical and other health service

Section 1861(s)(2) of the Social Security Act (42 U.S.C. 1395x(s)(2)) is amended—(1)in subparagraph (II), by striking and at the end;(2)in subparagraph (JJ), by adding and at the end; and(3)by adding at the end the following new subparagraph:

(KK)prescription digital therapeutics furnished on or after January 1, 2026;

(c)

Requirements for prescription digital therapeutics under Medicare

Part B of the Social Security Act (42 U.S.C. 1395j et seq.) is amended by inserting after section 1834A the following new section:

1834B.

Requirements for prescription digital therapeutics

(a)

Payment

(1)

In general

Not later than 1 year after the date of enactment of this section, the Secretary shall establish a payment methodology for manufacturers of prescription digital therapeutics, which may consist of a one-time payment or periodic payments, as determined appropriate by the Secretary.(2)

Considerations for payment methodology

For purposes of establishing the payment methodology under paragraph (1), the Secretary shall consider—(A)the actual list charge of such prescription digital therapeutic;(B)the weighted median (calculated by arraying the distribution of all payment rates reported for the most recent period for which such rates were reported under subsection (c)(1) for each prescription digital therapeutic weighted by volume for each payor and each manufacturer) for such prescription digital therapeutic;(C)in the case of a prescription digital therapeutic that requires ongoing use, the amount for such ongoing use; and(D)other factors as determined by the Secretary.(b)

Coding

(1)

In general

Not later than 2 years after the date of enactment of this section, the Secretary shall establish product-specific HCPCS codes for prescription digital therapeutic covered under this title.(2)

Temporary code

The Secretary shall adopt temporary product-specific HCPCS codes for purposes of providing payment under this title until a permanent product-specific HCPCS code has been established under paragraph (1).(c)

Manufacturer reporting

(1)

In general

Beginning on January 1, 2026, each manufacturer of a prescription digital therapeutic covered under this title shall submit to the Secretary, at such time and in such manner as specified by the Secretary, and annually thereafter, a report describing—(A)the payment rate that was paid by each private payor for each prescription digital therapeutic during the period specified by the Secretary;(B)the volume of such prescription digital therapeutic distributed to each such payor for such period; and(C)the number of individual users of such prescription digital therapeutic for such period.(2)

Treatment of discounts

The payment rate reported by a manufacturer in accordance with paragraph (1)(A) shall reflect all discounts, rebates, coupons, and other price concessions, including those described in section 1847A(c)(3).(3)

Civil monetary penalty

(A)

In general

If the Secretary determines that a manufacturer has failed to report, or made a misrepresentation or omission in reporting, information under this subsection with respect to a prescription digital therapeutic, the Secretary may apply a civil money penalty in an amount of up to $10,000 per day for each failure to report or each such misrepresentation or omission.(B)

Application

The provisions of section 1128A (other than subsections (a) and (b)) shall apply to a civil money penalty under this paragraph in the same manner as they apply to a civil money penalty or proceeding under section 1128A(a).(4)

Confidentiality

Information reported under this subsection shall be treated in the same manner in which information disclosed by a manufacturer or a wholesaler of a covered outpatient drug is treated under section 1927(b)(3)(D).(d)

Definitions

For purposes of this section:(1)

Actual list charge

The term actual list charge means the publicly available payment rate for a prescription digital therapeutic on the first day that such prescription digital therapeutic is available for purchase by a private payor.(2)

HCPCS

The term HCPCS means, with respect to an item, the code under the Healthcare Common Procedure Coding System (HCPCS) (or a successor code) for such item.(3)

Manufacturer

The term manufacturer has the meaning given such term by section 820.3(o) of title 21, Code of Federal Regulations (or any successor regulation).(4)

Prescription digital therapeutic

The term prescription digital therapeutic has the meaning given such term in section 1861(nnn).(5)

Private payor

The term private payor has the meaning given such term in section 1834A(a)(8).