Last week, Centers for Medicare and Medicaid Services Administrator Seema Verma revealed — in a Wall Street Journal editorial and an informal request for information (RFI) — that CMS would be heading in a “new direction” with the Center for Medicare and Medicaid Innovation (CMMI).

Primarily, Verma’s CMS seems interested in dropping the mandatory adoption of new payment methods in favor of a purely voluntary process. Beyond that, the RFI encourages more cost transparency to consumers, more free market competition among providers, and more innovation on the state level.

One area where CMMI and digital health meet is around the National Diabetes Prevention Program (DPP), an evidence-based 12-week course that is on track to become the first preventative service model to be fully reimbursable by Medicare. The program can be delivered in person or digitally, with the latter being offered by companies like Omada Health and Canary Health.

CMS announced its intention to reimburse for the DPP in March of 2016 and published proposed rule changes to that effect in July 2016. All along, the implication from CMS was that digital would be included along with in-person programs, with both being reimbursed based on outcomes.

Since then, however, CMS has backed off that line, claiming instead that it needs more evidence to include virtual providers. This has prompted some pushback, particularly from Medicare Advantage payers who, as it stands now, will be required to offer DPP as a core benefit. That means, among other things, that it needs to be available to all members, regardless of zip code, which is leading plans to support the inclusion of virtual programs.

All of this is to say that the fate of DPPs — in particular digital DPPs — was already somewhat in question when Verma announced the Center’s new direction. So what will happen to DPP reimbursement now?

Both Brenda Schmidt, founder and CEO of Solera Health (which offers a marketplace for digital therapeutics, starting with DPPs), and Adam Brickman, senior director of strategic communications and public policy at Omada Health, are decidedly optimistic.

“I think everyone was concerned about it being popular with the new administration, but relative to the DPP benefit, I met with CMS three weeks ago and that is solid,” Schmidt told MobiHealthNews. “In fact there was a lot of conversation about whether CMS was actually interested in this scaling significantly or whether it was just something they wanted to pat themselves on the back for passing and not really interested in implementation and scaling of the program. But they are very much interested in that.”

“I don’t necessarily see them moving away from demos like the NDPP,” Brickman said. “If you look at the six guiding principals they lay out in the RFI, you can see DPP, particularly virtual DPP, checking all these boxes.”

For instance, CMMI wants to encourage competition in the market. There already is a competitive market for DPP programs, and virtual programs only increase that competition and consumer choice because they’re not geographically limited. One of those guiding principals even points to a positive outcome for virtual programs.

“On ... small-scale testing, the last thing they say there in that intro paragraph is they want to focus on key payment interventions rather than on specific devices or equipment,” Brickman said. “And I read that and chuckled a little bit, because when it comes to virtual DPP, that was something they had the opportunity to do — to say, listen, the fact that this intervention was successful wasn’t based on the fact that it was performed at the YMCA. They realized that in the model expansion and they said you can perform it anywhere in person, but they didn’t go all the way and say ‘And you can do it virtually, and we’re only going to pay on outcomes anyway, so we’re isolated from overpayment and we’re only going to be paying for services that are effective.’”

Schmidt says its too late for the inclusion of the virtual DPP in the upcoming physician fee schedule, which will include DPP for the first time, but CMMI is proceeding with a large-scale pilot that will build data toward opening up reimbursement for digital programs.

“I think it comes back to the fact that this didn’t come through a normal basic benefits through congress. It came through CMMI through a model pilot. So they don’t have the authority to apply their results to a different model,” she said. “And I think the other piece of it, frankly, is they are concerned that if they allow DPP more broadly without testing them extensively, there is a concern that it’s setting a precedent for a wide variety of other types of digital interventions that CMS is not prepared to reimburse for fee for service. So it has broader implications than DPP.”

There’s another point of contention, which is the fear that digital models would crowd out in-person options because they’re so much easier for health plans to offer.

“Our data show that almost 100 percent of people 65 and over are choosing a community location,” Schmidt said. “If they don’t have access to a community location, I think virtual or digital would be a phenomenal option, or if that senior picks that. My concern is if CMS allows digital and virtual delivery, the health plans will take the path of least resistance and it will be the only thing they offer. Either internally through their telephone coaches or partnering with a digital app. And we very much believe that member choice drives engagement and outcomes and there should be a wide variety of these programs available to seniors. We encourage CMS to structure the final rule to ensure that a member has choice between a wide variety of in-person and digital providers.”

Brickman thinks this concern is a little overblown. It’s negated by the very thing the new CMMI approach is championing: free market competition.

“There is a logistical ease to signing one contract with a digital provider; that is certainly easier than going around and finding all the qualified Medicare DPP that are in-person and signing individual contracts with all of them,” he said. “That being said, one of the things Medicare Advantage Plans care deeply about is benefit retention. They hate turnover. So at that point it becomes a market-driven question. If I’m a consumer and I know that Medicare Advantage plan A offers only digital and Medicare Advantage plan B offers both digital and in-person, the fact that I have that flexibility might cause me to choose one plan over another. I don’t disagree that you want to have beneficiary choice here, but again, including just in-person doesn’t really provide choice.”

While digital may end up taking a little while to catch up with in-person, the bottom line is that DPP seems safe under CMS’s new direction for CMMI.

“Honestly, I think we’re going to hold up DPP as a really illustrative example of something CMMI has done in the past that can actually provide almost a roadmap for how they can move forward,” Brickman said.