Federal

Access to Prescription Digital Therapeutics Act of 2023

Source: Congress.gov · 1,553 words in original text

What This Bill Does

This bill changes the Medicare and Medicaid programs to cover prescription digital therapeutics. A prescription digital therapeutic is technology like software, apps or devices that the FDA (Food and Drug Administration) has cleared or approved to prevent, manage or treat a medical disease or condition. The bill requires the government to create a payment system and coding system for these products.

Who It Affects

- Medicare beneficiaries (people on the Medicare health insurance program) - Medicaid beneficiaries (people on the Medicaid health insurance program) - Manufacturers of prescription digital therapeutics - The federal government (specifically the Secretary of Health and Human Services)

Key Provisions

- Medicare will cover prescription digital therapeutics starting January 1, 2024 (Sec. 2(b)) - The government must create a payment method for these products within one year of the law passing (Sec. 2(c)) - Manufacturers must report annually to the government about payment rates they received, volume distributed and number of users (Sec. 2(c)) - The government must establish product-specific medical coding numbers for these products within two years, and use temporary codes until permanent ones exist (Sec. 2(c)) - Medicaid will cover prescription digital therapeutics as defined in the Medicare section (Sec. 3)

What Changes

If this bill becomes law, Medicare will start paying for FDA-cleared or approved prescription digital therapeutics products beginning January 1, 2024. Medicaid programs will also cover these products. Manufacturers will need to report their pricing information to the government each year. The government will create a new payment method and coding system specifically for these digital health products.

Important Definitions

- **Prescription digital therapeutic**: A product, device, app or other technology that is FDA-cleared or approved and has FDA approval to prevent, manage or treat a disease or condition, primarily uses software to work, and meets certain exemption requirements (Sec. 2(a)) - **HCPCS codes**: Healthcare Common Procedure Coding System codes used to identify medical items and services for payment purposes (Sec. 2(c)) - **Actual list charge**: The publicly available price for the prescription digital therapeutic on the first day it is available for purchase (Sec. 2(c)) - **Manufacturer**: Any company that makes prescription digital therapeutics (Sec. 2(c)) - **Private payor**: Not specified in bill text

Effective Date

Medicare coverage begins January 1, 2024 (Sec. 2(b)). Manufacturer reporting requirements begin January 1, 2024 (Sec. 2(c)). The government must establish permanent coding within 2 years of the law passing and a payment method within 1 year of the law passing (Sec. 2(c)).

II 118TH CONGRESS 1ST SESSION S. 723 To amend titles XVIII and XIX of the Social Security Act to provide for coverage of prescription digital therapeutics under such titles, and for other purposes. IN THE SENATE OF THE UNITED STATES MARCH 8, 2023 Mrs. SHAHEEN (for herself, Mrs. CAPITO, Mr. BOOKER, and Mrs. BLACK- BURN) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend titles XVIII and XIX of the Social Security Act to provide for coverage of prescription digital thera- peutics under such titles, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Access to Prescription 4 Digital Therapeutics Act of 2023’’. 5 VerDate Sep 11 2014 05:00 Mar 16, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S723.IS S723 kjohnson on DSK79L0C42PROD with BILLS 2 •S 723 IS SEC. 2. COVERAGE AND PAYMENT OF PRESCRIPTION DIG- 1 ITAL THERAPEUTICS UNDER THE MEDICARE 2 PROGRAM. 3 (a) PRESCRIPTION DIGITAL THERAPEUTIC DE- 4 FINED.—Section 1861 of the Social Security Act (42 5 U.S.C. 1395x) is amended by adding at the end the fol- 6 lowing new subsection: 7 ‘‘(nnn) PRESCRIPTION DIGITAL THERAPEUTIC.— 8 The term ‘prescription digital therapeutic’ means a prod- 9 uct, device, internet application, or other technology 10 that— 11 ‘‘(1) is cleared or approved under section 12 510(k), 513(f)(2), or 515 of the Federal Food, 13 Drug, and Cosmetic Act; 14 ‘‘(2) has a cleared or approved indication for 15 the prevention, management, or treatment of a med- 16 ical disease, condition, or disorder; 17 ‘‘(3) primarily uses software to achieve its in- 18 tended result; and 19 ‘‘(4) is a device that is exempt from section 20 502(f)(1) of the Federal Food, Drug, and Cosmetic 21 Act under section 801.109 of title 21 of the Code of 22 Federal Regulations (or any successor regulation).’’. 23 (b) COVERAGE AS MEDICAL AND OTHER HEALTH 24 SERVICE.—Section 1861(s)(2) of the Social Security Act 25 (42 U.S.C. 1395x(s)(2)) is amended— 26 VerDate Sep 11 2014 05:00 Mar 16, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S723.IS S723 kjohnson on DSK79L0C42PROD with BILLS 3 •S 723 IS (1) in subparagraph (II), by striking ‘‘and’’ at 1 the end; 2 (2) in subparagraph (JJ), by adding ‘‘and’’ at 3 the end; and 4 (3) by adding at the end the following new sub- 5 paragraph: 6 ‘‘(KK) prescription digital therapeutics fur- 7 nished on or after January 1, 2024;’’. 8 (c) REQUIREMENTS FOR PRESCRIPTION DIGITAL 9 THERAPEUTICS UNDER MEDICARE.—Part B of the Social 10 Security Act (42 U.S.C. 1395j et seq.) is amended by in- 11 serting after section 1834A the following new section: 12 ‘‘SEC. 1834B. REQUIREMENTS FOR PRESCRIPTION DIGITAL 13 THERAPEUTICS. 14 ‘‘(a) PAYMENT.— 15 ‘‘(1) IN GENERAL.—Not later than 1 year after 16 the date of enactment of this section, the Secretary 17 shall establish a payment methodology for manufac- 18 turers of prescription digital therapeutics, which 19 may consist of a one-time payment or periodic pay- 20 ments, as determined appropriate by the Secretary. 21 ‘‘(2) CONSIDERATIONS FOR PAYMENT METHOD- 22 OLOGY.—For purposes of establishing the payment 23 methodology under paragraph (1), the Secretary 24 shall consider— 25 VerDate Sep 11 2014 05:00 Mar 16, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S723.IS S723 kjohnson on DSK79L0C42PROD with BILLS 4 •S 723 IS ‘‘(A) the actual list charge of such pre- 1 scription digital therapeutic; 2 ‘‘(B) the weighted median (calculated by 3 arraying the distribution of all payment rates 4 reported for the most recent period for which 5 such rates were reported under subsection 6 (c)(1) for each prescription digital therapeutic 7 weighted by volume for each payor and each 8 manufacturer) for such prescription digital 9 therapeutic; 10 ‘‘(C) in the case of a prescription digital 11 therapeutic that requires ongoing use, the 12 amount for such ongoing use; and 13 ‘‘(D) other factors as determined by the 14 Secretary. 15 ‘‘(b) CODING.— 16 ‘‘(1) IN GENERAL.—Not later than 2 years 17 after the date of enactment of this section, the Sec- 18 retary shall establish product-specific HCPCS codes 19 for prescription digital therapeutic covered under 20 this title. 21 ‘‘(2) TEMPORARY CODE.—The Secretary shall 22 adopt temporary product-specific HCPCS codes for 23 purposes of providing payment under this title until 24 VerDate Sep 11 2014 05:00 Mar 16, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S723.IS S723 kjohnson on DSK79L0C42PROD with BILLS 5 •S 723 IS a permanent product-specific HCPCS code has been 1 established under paragraph (1). 2 ‘‘(c) MANUFACTURER REPORTING.— 3 ‘‘(1) IN GENERAL.—Beginning on January 1, 4 2024, each manufacturer of a prescription digital 5 therapeutic covered under this title shall submit to 6 the Secretary, at such time and in such manner as 7 specified by the Secretary, and annually thereafter, 8 a report describing— 9 ‘‘(A) the payment rate that was paid by 10 each private payor for each prescription digital 11 therapeutic during the period specified by the 12 Secretary; 13 ‘‘(B) the volume of such prescription dig- 14 ital therapeutic distributed to each such payor 15 for such period; and 16 ‘‘(C) the number of individual users of 17 such prescription digital therapeutic for such 18 period. 19 ‘‘(2) TREATMENT OF DISCOUNTS.—The pay- 20 ment rate reported by a manufacturer in accordance 21 with paragraph (1)(A) shall reflect all discounts, re- 22 bates, coupons, and other price concessions, includ- 23 ing those described in section 1847A(c)(3). 24 ‘‘(3) CIVIL MONETARY PENALTY.— 25 VerDate Sep 11 2014 05:00 Mar 16, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S723.IS S723 kjohnson on DSK79L0C42PROD with BILLS 6 •S 723 IS ‘‘(A) IN GENERAL.—If the Secretary deter- 1 mines that a manufacturer has failed to report, 2 or made a misrepresentation or omission in re- 3 porting, information under this subsection with 4 respect to a prescription digital therapeutic, the 5 Secretary may apply a civil money penalty in an 6 amount of up to $10,000 per day for each fail- 7 ure to report or each such misrepresentation or 8 omission. 9 ‘‘(B) APPLICATION.—The provisions of 10 section 1128A (other than subsections (a) and 11 (b)) shall apply to a civil money penalty under 12 this paragraph in the same manner as they 13 apply to a civil money penalty or proceeding 14 under section 1128A(a). 15 ‘‘(4) CONFIDENTIALITY.—Information reported 16 under this subsection shall be treated in the same 17 manner in which information disclosed by a manu- 18 facturer or a wholesaler of a covered outpatient drug 19 is treated under section 1927(b)(3)(D). 20 ‘‘(d) DEFINITIONS.—For purposes of this section: 21 ‘‘(1) ACTUAL LIST CHARGE.—The term ‘actual 22 list charge’ means the publicly available payment 23 rate for a prescription digital therapeutic on the first 24 VerDate Sep 11 2014 05:00 Mar 16, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S723.IS S723 kjohnson on DSK79L0C42PROD with BILLS 7 •S 723 IS day that such prescription digital therapeutic is 1 available for purchase by a private payor. 2 ‘‘(2) HCPCS.—The term ‘HCPCS’ means, with 3 respect to an item, the code under the Healthcare 4 Common Procedure Coding System (HCPCS) (or a 5 successor code) for such item. 6 ‘‘(3) MANUFACTURER.—The term ‘manufac- 7 turer’ has the meaning given such term by section 8 820.3(o) of title 21, Code of Federal Regulations (or 9 any successor regulation). 10 ‘‘(4) PRESCRIPTION DIGITAL THERAPEUTIC.— 11 The term ‘prescription digital therapeutic’ has the 12 meaning given such term in section 1861(nnn). 13 ‘‘(5) PRIVATE PAYOR.—The term ‘private 14 payor’ has the meaning given such term in section 15 1834A(a)(8).’’. 16 SEC. 3. COVERAGE OF PRESCRIPTION DIGITAL THERA- 17 PEUTICS UNDER THE MEDICAID PROGRAM. 18 (a) IN GENERAL.—Section 1905(a) of the Social Se- 19 curity Act (42 U.S.C. 1396d(a)) is amended— 20 (1) in paragraph (30), by striking ‘‘; and’’ and 21 inserting a semicolon; 22 (2) by redesignating paragraph (31) as para- 23 graph (32); and 24 VerDate Sep 11 2014 05:00 Mar 16, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S723.IS S723 kjohnson on DSK79L0C42PROD with BILLS 8 •S 723 IS (3) by inserting the following paragraph after 1 paragraph (30): 2 ‘‘(31) prescription digital therapeutics (as de- 3 fined in section 1861(nnn)); and’’. 4 (b) CONFORMING AMENDMENTS.—Effective the day 5 after the amendments made by sections 5121 and 5122 6 of division FF of the Consolidated Appropriations Act, 7 2023 (Public Law 117–328) take effect— 8 (1) subsections (a)(84)(A) and (nn)(3) of sec- 9 tion 1902 of the Social Security Act (42 U.S.C. 10 1396a) are each amended by striking ‘‘paragraph 11 (31)’’ and inserting ‘‘the last numbered paragraph’’; 12 and 13 (2) the fifth sentence of section 1905(a) of such 14 Act (42 U.S.C. 1396d(a)) is amended by striking 15 ‘‘paragraph (30)’’ and inserting ‘‘the last numbered 16 paragraph’’. 17 Æ VerDate Sep 11 2014 05:00 Mar 16, 2023 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6301 E:\BILLS\S723.IS S723 kjohnson on DSK79L0C42PROD with BILLS

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