Congress opens Medicare to digital health products with no price controls

What it does

This bill requires Medicare and Medicaid to cover prescription digital therapeutics—software-based medical products cleared by the FDA—starting January 1, 2026. It directs the Secretary of Health and Human Services to establish payment rates for these products within one year, create billing codes within two years, and require manufacturers to report pricing and usage data annually, with penalties up to $10,000 per day for false reporting.

Why we flagged it

The bill's core function is to establish Medicare/Medicaid coverage and reimbursement pathways for a new category of FDA-cleared digital products. It is fundamentally a market-access and payment-methodology bill, not a consumer-protection or cost-control measure.

What the text implies

• The bill anchors Medicare/Medicaid reimbursement to 'actual list charge' (the first publicly available price), giving manufacturers strong incentive to set high initial prices. No explicit price-negotiation or cost-effectiveness review is required before coverage begins.
• Manufacturers must report private-payor pricing and volume data to CMS, but this data is treated as confidential (like drug pricing under section 1927). This may limit transparency about whether government reimbursement rates are benchmarked to competitive private-market prices or inflated by manufacturer list prices.
• The bill does not require clinical-effectiveness or comparative-effectiveness review before Medicare coverage, unlike some traditional medical devices. Coverage is automatic for any FDA-cleared product meeting the definition, potentially including products with limited real-world evidence.
• Medicaid coverage is mandated but payment rates are not specified in the bill—states may face pressure to reimburse at rates set by Medicare, potentially straining state budgets without explicit appropriation.
• The definition of 'prescription digital therapeutic' is narrow (must be FDA-cleared under specific sections and exempt from certain device regulations), which may exclude many digital health products and create a protected market for products that meet the definition.

Who it affects

Patients gain access to FDA-cleared digital treatments through Medicare/Medicaid, potentially lowering out-of-pocket costs and expanding treatment options. However, the bill creates a new payment pathway with minimal price controls, allowing manufacturers to set initial list prices that become the baseline for government reimbursement, potentially inflating costs to taxpayers and beneficiaries.

Who stands to gain

• Digital therapeutics manufacturers (e.g., Livongo/Teladoc, Omada Health, Proteus Digital Health, Can
• FDA-cleared digital health device companies
• Health insurance intermediaries managing digital benefit administration

Named in the bill

Medicare, Medicaid, HHS Secretary, FDA, CMS, Livongo (HUM), Legend Biotech (LGND), Boston Scientific (BSX), Align Technology (ALGN), GEN (Genmab or Genesis Energy, context unclear), Healthcare Common Procedure Coding System (HCPCS)

Where it stands

10 cosponsors: 6 Democrats, 4 Republicans.

• May 8, 2025 — Introduced · Congress.gov: “Introduced in House”
• May 8, 2025 — Referred to House Committee on Ways and Means and House Committee on Energy and Commerce · Congress.gov: “Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a…”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

1 lobbying clients named this bill on 2 disclosure filings across 2 quarters, Dec 2025 to Jun 2026. Those filings disclosed $160,000 in lobbying spend. A filing names 4 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 0% of bills with at least one filing.

Kevin Hern, the sponsor, reported $2,075,651 in PAC receipts in the 2026 cycle.

• Academy of Managed Care Pharmacy — $160,000 on 2 filings

Lobbying Disclosure Act filings through Jul 19, 2026. A filing shows who paid to lobby on a bill it names, not what changed.