Why Digital Mental Health is Poised to Thrive in 2025
The outlook for digital mental health solutions in 2025 is promising, with health tech companies focusing on behavioral health expecting favorable reimbursement trends. Temporary payment flexibilities for telehealth, hospital-at-home care, and remote prescribing have been extended until March 31, preserving COVID-19-era reimbursement policies for remote care across medical specialties. However, new reimbursement codes introduced by the Centers for Medicare and Medicaid Services (CMS) may have an even more profound impact on mental health tech.
Key CMS Reimbursement Changes
As highlighted by Modern Healthcare, the recently announced codes will allow providers to be reimbursed for utilizing FDA-cleared or De Novo-authorized digital mental health treatment applications or devices. While these codes are currently limited in scope, experts view this as a pivotal moment, reflecting a growing acknowledgment from CMS and private insurers of the need to support virtual mental health platforms.
“There has been a shortage of good mental health providers, and it’s easy to argue that mental health services can be delivered virtually. No physical examination is needed,” said Carrie Nixon, co-founder and managing partner of Nixon Gwilt Law, which advises digital health companies. “Mental and behavioral health has become the starting point for virtual, synchronous, and asynchronous care delivery.”
Opportunities for Digital Therapeutics
Digital therapeutics companies, which develop treatments primarily delivered through smartphone applications, have long struggled due to a lack of reimbursement. Andy Molnar, CEO of the Digital Therapeutics Association, told Modern Healthcare that the new codes could provide a lifeline to behavioral health-focused companies like Big Health.
Big Health, which offers FDA-cleared apps for insomnia and anxiety, stands to benefit significantly. CEO Yael Berman explained that while demand from providers has been strong, the absence of reimbursement options has hindered the company’s growth.
“Reimbursement has really been the key barrier,” Berman said. “Providers have been interested in our solutions, but without reimbursement, there was no way to offer them to patients unless they were free.”
Freespira, another digital therapeutics company, offers a mobile solution to reduce symptoms of panic disorders, panic attacks, and PTSD. While its offerings may not yet fit the scope of CMS’ codes, CEO Joe Perekupka told Modern Healthcare he believes this shift represents a progressive approach to addressing the mental health crisis.
“This is a monumental shift in CMS’ philosophy,” Perekupka said. “It’s a big shot of adrenaline for digital mental health treatment.”
Expanding Access Through Federal and Commercial Efforts
Outside the digital therapeutics space, virtual mental health companies like Brightside Health and Talkspace are also seeing a shift in how mental health care is perceived and reimbursed. Talkspace, for instance, has begun offering services to Medicare members and expects significant adoption in 2025. Erin Boyd, Talkspace’s chief growth officer, noted in Modern Healthcare that the company has transitioned from a direct-to-consumer model to partnerships with insurers and employers, with payer-based revenue accounting for more than 65% of its income in 2024.
“After COVID, it just made sense to be in as many networks as possible,” Boyd said. “We emphasized insurance-based access, which has driven substantial growth in our user base.”
Challenges Ahead
While the new reimbursement codes offer a path forward, companies will need to demonstrate their value to CMS and private insurers. Andy Molnar cautioned in his comments to Modern Healthcare that CMS will expand coverage cautiously, basing decisions on usage rates and outcomes data.
“If the codes aren’t used or the data doesn’t show strong ROI, CMS will be slow to expand coverage,” Molnar said.
A Bright Future for Digital Mental Health
With increased federal and commercial support, digital mental health platforms are well-positioned to play a pivotal role in addressing the growing mental health crisis. The introduction of reimbursement codes marks a significant step toward integrating digital therapeutics and virtual care into the broader healthcare ecosystem. For 2025, the industry is poised to flourish, driven by innovation and a shift toward more accessible, scalable mental health solutions.
This article is adapted from insights originally reported by Modern Healthcare.