New year, new digital therapeutics pilot

Digital therapeutics (DTx) is a field that, for many players, has been rich in promises but low in profits.

DTx refers to products prescribed to treat specific diseases or disorders that are typically regulated by the FDA in the software as a medical device category. As of December 2024, the FDA has cleared 192 such devices, per a review in npj Digital Medicine.

But the field has a rocky history.

The first company to get a DTx device cleared in 2017, Pear Therapeutics, announced its bankruptcy in 2023 after struggling to find a sustainable reimbursement strategy for its apps, which it had priced at $1,000+ in 2022. Digital medicine company Akili Interactive ditched the label altogether, pivoting from a prescription to over-the-counter model after poor sales in 2023 before selling off its assets in 2024.

A new FDA pilot aims to encourage uptake through its new Technology-Enabled Meaningful Patient Outcomes (TEMPO) model, which was announced on Dec. 5. The FDA began collecting statements of interest for the pilot on Jan. 2.

This model will allow certain medical professionals to prescribe DTx devices to patients before the devices receive FDA clearance, according to the Centers for Medicare and Medicaid (CMS). Real-world performance data could then inform clearance.

A middle ground. As it stands now, it can be expensive and time consuming for companies to gather necessary outcomes data and wait for an FDA decision. Many companies choose to market themselves as general wellness apps to avoid having to pass through FDA regulatory hoops, Vaile Wright, senior director of healthcare innovation at professional organization the American Psychological Association, told Healthcare Brew at CES 2026.

“The [current] FDA clearance pathway, it’s just not built for software. It disincentivizes companies from engaging in that space,” Wright said.

TEMPO provides a potential “middle ground” between going straight to market through app stores and going through the FDA clearance process, she added.

Participation in TEMPO will be limited to prescribers who are part of the separate CMS Center for Medicare and Medicaid Innovation model, known as Advancing Chronic Care with Effective, Scalable Solutions (ACCESS), that tests outcome-based payments. Both TEMPO and ACCESS require data on outcomes, so combining them could be a real two-for-one deal.

Rewinding. Along with getting clearance, the other big barrier keeping these devices from becoming more mainstream is payer reimbursement, Wright said. Leaders from both Pear Therapeutics and Akili Interactive partially attributed their company’s struggles to a lack of widespread coverage.

The DTx industry was expected to have a big year in 2025 because, after years of advocacy by manufacturers, Medicare started covering these devices. Seven digital mental health treatment devices were initially eligible for reimbursement, and the industry hoped that would spike their use.

Over a year later, experts are split on how much of a difference Medicare coverage made.

In Wright’s opinion, uptake did not meet its “potential.” She believes Medicare coverage has not increased the use of the devices as much as she had hoped because CMS did not set a national rate and instead left that task to regional Medicare contractors.

“Just from our conversations with them, it’s been clear that [the regional contractors] need more direction,” Wright said.

Digging into data. The new Medicare billing codes were used for 446 patients across 897 visits through Q3 2025, according to an analysis shared with Healthcare Brew on Jan. 29 by Komodo Health, a healthcare analytics AI company. That’s up from 99 patients across 184 visits in Q1 2025.

Evan Woodard, Komodo’s senior clinical product manager, was more optimistic than Wright about these results.

“What we’re seeing in these insights is a clear inflection point: Digital mental health therapies are moving beyond pilots and into mainstream clinical workflows,” Woodward told Healthcare Brew via email.

A CMS spokesperson told Healthcare Brew the agency lacked “sufficient, standardized data” to set a national rate, but is open to setting one in the future “as the evidence base matures.”