The Centers for Medicare & Medicaid Services (CMS) published proposed versions of the Calendar Year 2026 (CY 2026) Physician Fee Schedule (PFS) and Hospital Outpatient Prospective Payment System (OPPS) rules on July 16, 2025, and July 17, 2025, respectively.
Issued annually, the OPPS and PFS rules outline updates to Medicare’s payment policies for the services of physicians and other billing professionals, hospital outpatient departments and ambulatory surgical centers.
Some of the proposed changes for CY 2026 continue to expand opportunities for digital health across telehealth, SaaS, and DTx.
New Opportunities for Digital Therapeutics (DTx)
CMS reimburses practitioners for certain digital mental health treatment (DMHT) services furnished incident to behavioral health services under a behavioral health treatment plan of care.
In the PFS proposed rule, CMS would expand payment policies for DMHT to include DTx to treat attention deficit hyperactivity disorder (ADHD).
CMS also requested feedback regarding the creation of new payment policies for other digital therapy devices (e.g., those for treatment of gastrointestinal conditions, sleep disorders related to psychiatric conditions, and fibromyalgia), as well as establishing separate, broader policies for digital tools used by practitioners to encourage healthy lifestyle choices as part of mental health treatment.
Permanent Expansion of Supervision Flexibility
Certain services under Medicare Part B must be performed under supervision of a practitioner (by general supervision, direct supervision or personal supervision). Historically, direct supervision required the supervising practitioner to be physically present and immediately available to assist. Since the COVID-19 Public Health Emergency (PHE), there has been more flexibility on a temporary basis for direct supervision, meaning the supervising practitioner needs only to be immediately available by audio/video real-time communication.
In the PFS proposed rule, CMS would permanently enable this more flexible approach to direct supervision (with the exception of services with a global surgery indicator of 010 or 090). This permanent flexibility is highly beneficial for medical practices that provide services via telehealth, since individual clinicians are often in different locations (including different states) when providing services virtually. CMS notes that this does not mean virtual presence may always be sufficient for every service and for every beneficiary, and ultimately the practitioner should use their professional judgment as to what is appropriate on a case-by-case basis.
Permanent Removal of Frequency Limitations on Certain Telehealth Services
CMS has historically included frequency limitations on certain telehealth services to ensure that telehealth augments, but does not replace, in-person care. Limitations include 1 subsequent hospital care service through telehealth every 3 days, 1 subsequent nursing facility visit through telehealth every 14 days, and 1 critical care consultation service through telehealth per day. While these requirements have been flexible since the PHE, CMS proposed in the PFS permanently removing the frequency limitations because claims data shows that these services are provided infrequently via telehealth, and CMS believes practitioners are best suited to determine whether a service can be appropriately provided via telehealth.
Potential for SaaS Reimbursement
In both proposed rules, CMS acknowledged that in recent years there have been “rapid developments” in software as a service (SaaS) technologies used in clinical decision-making. As SaaS products continue to enter the market, CMS is soliciting public comments to evaluate how to pay for such services consistently across different settings and technologies.
A Focus on Chronic Disease Prevention and Management
The proposed PFS rule includes a request for public input on how CMS could support chronic disease prevention and management, including whether there are additional services that should be separately reimbursable. The proposed rule raises a variety of topics, including supervised exercise programs, medically tailored meals, and digital therapeutics that treat or manage symptoms of chronic diseases.
CMS also said it is considering creating additional coding and payment for health coaching and “motivational interviewing,” which is designed to strengthen personal motivation to meet specific health goals, and asked for feedback on whether these services could be performed via audiovisual or audio-only communication.
A Simplified Medicare Telehealth Services List Process
In the PFS proposed rule, CMS outlined a streamlined process to make additions, changes and deletions to the Medicare Telehealth Services List:
- Determine whether the service is separately payable under the PFS;
- Determine whether the service is subject to Section 1834(m) of the Social Security Act (which details requirements for Medicare coverage of telehealth services); and
- Review the elements of the service as described by the HCPCS code and determine whether each is capable of being furnished using an interactive telecommunications system.
The simplified process would eliminate the current requirement for complex evidence reviews to determine whether a telehealth service has a clinical benefit equivalent to that of in-person services.
The proposed change stems from feedback indicating that it is difficult to determine the level of evidence necessary to meet the current standards, and CMS’s opinion that practitioners instead are best suited to determine whether a service can be adequately provided using telehealth modalities on a case-by-case basis.
CMS also proposed removing the designations of services as either “provisional” or “permanent.” Instead, all CMS-approved services would be added to the list on a permanent basis.
New Medicare Telehealth Services
Additionally, CMS proposed adding services to the list, including multiple-family group psychotherapy (90849), group behavioral counseling for obesity (G0473), infectious disease add-on (G0545) and auditory osseointegrated sound processor (92622 and 92623). CMS also proposed declining the addition of certain services to the list, including dialysis procedures (90935, 90937, 90945 and 90947), telemedicine E/M services (98000–98015) (though other codes are available for E/M services delivered via telehealth) and home INR monitoring (G0248).
What’s Next?
The public comment period for each proposed rule will remain open for 60 days from publication.
Digital health companies should pay close attention to publication of the final versions of the CY 2026 PFS and OPPS, expected this fall, to evaluate how the ultimate changes may impact their business models.
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