Medicare and Medicaid to Cover App-Based Therapies Starting in 2026: What Digital Medicine Means for Your Wallet

This bill, the Access to Prescription Digital Therapeutics Act of 2025, is essentially the federal government catching up to the digital age of medicine. Starting January 1, 2026, it mandates that both Medicare Part B and Medicaid must cover “Prescription Digital Therapeutics” (PDTs). A PDT isn't just a wellness app; it’s software—think an app, device, or program—that the FDA has already cleared or approved specifically to prevent, manage, or treat a medical condition. This means your doctor could soon prescribe software treatment, and federal insurance will be required to pay for it.

Your Phone, Your Pharmacy: What’s Covered?

PDTs are distinct because they use software as the primary therapeutic tool. For Medicare patients, this expands coverage beyond traditional pills and devices to include these new digital treatments, which could be anything from an app managing diabetes to a program treating substance abuse. The bill places coverage under Medicare Part B, which typically handles outpatient services and durable medical equipment, ensuring that the cost-sharing structure for patients is similar to other medical services they already use. For Medicaid users, the change is even simpler: PDTs are added directly to the list of services the program covers (SEC. 3).

The Price Tag: How the Government Pays for Apps

One of the trickiest parts of this bill is figuring out how to pay for software that isn't sold like a traditional drug. The Secretary of Health and Human Services has to create a payment system within a year of the law passing. They’ll look at a few key numbers to set the Medicare rate: the manufacturer’s public list price, and, crucially, the median price that private insurance companies are already paying for that specific PDT (SEC. 2). This is designed to keep the federal rate grounded in the real market price, rather than letting manufacturers set an arbitrary high number. The payment could be a single upfront fee or spread out over time, giving the government flexibility depending on the product.

The Fine Print for Manufacturers: Data and Penalties

If you manufacture one of these digital therapies, get ready for some serious paperwork. Starting in 2026, manufacturers must report detailed annual data to the government, including the payment rates from every private insurance company, the number of units sold, and total patient utilization (SEC. 2). This transparency is huge for taxpayers, ensuring the government knows what the market is actually bearing. But here’s the kicker: if a manufacturer fails to report this data, or misrepresents it—say, by hiding discounts or rebates—they face a $10,000 per day penalty for every instance. That kind of fine puts a serious focus on compliance and accuracy.

Real-World Impact: New Options, New Challenges

For a busy person managing a chronic condition, like a 35-year-old with pre-diabetes on Medicaid, this bill means access to potentially effective, non-pharmaceutical options previously only available if they could afford to pay out-of-pocket. If the payment structure works as intended, it could quickly drive down the cost barrier for these innovative tools. However, the government has two years to create permanent billing codes (HCPCS codes) for these products, meaning there could be a period of administrative confusion using temporary codes until the system is fully locked in. Ultimately, this legislation is a major step toward integrating software into the mainstream healthcare system, making your phone a legitimate tool in your medical treatment arsenal.