US Healthcare Reimbursement 2025: Innovation, Value & Policy Trends

In 2019, IDR Medical published an article that provided an in-depth overview of the U.S. healthcare reimbursement system, covering key topics like public and private payer coverage, coding systems, and the steps required to secure reimbursement for medical devices.

While much of the foundational information from that article remains relevant, the healthcare reimbursement landscape has evolved significantly over the past few years.

This updated article reflects the latest changes and trends in the healthcare reimbursement system, including the continued expansion of value-based care, the rise of telemedicine, and the growing importance of real-world evidence in reimbursement decisions. Additionally, emerging technologies such as AI-driven diagnostics, remote patient monitoring, and digital therapeutics are reshaping how devices are reimbursed and integrated into care pathways.

If you’re interested in the foundational information from our 2019 article, it is still available and provides valuable context. In this updated version, we focus on the key developments and adjustments that have taken place in the healthcare reimbursement system since 2019, offering fresh insights and strategies for navigating the reimbursement process in 2025.

Key Updates for 2025:

1. Evolving Payment Models and Value-Based Care

• Shift to Value-Based Care: In recent years, there has been a significant transition from fee-for-service models to value-based care models. These models emphasize patient outcomes and the quality of care, rather than the volume of services provided. Reimbursement is increasingly linked to the quality of patient outcomes, creating a need for devices and technologies that demonstrate clear clinical and economic value.
• Bundled Payments: Medicare and private insurers are experimenting with bundled payment models, where healthcare providers are paid a single, fixed amount for an entire episode of care, rather than for individual services. Devices that enhance efficiency or improve outcomes can support these models by lowering overall costs.

• COVID-19 Impact and Telehealth Expansion: The pandemic catalyzed widespread adoption of telehealth and remote monitoring services, a trend that remains strong. Insurers now increasingly reimburse for telemedicine consultations, remote patient monitoring (RPM) devices, and digital health solutions. Reimbursement structures are continuously evolving to incorporate these technologies.
• Remote Patient Monitoring (RPM) and Digital Health Integration: Technologies that allow for continuous health monitoring at home are now integral to patient care, especially for chronic disease management. RPM devices, including wearables and connected home devices, are increasingly being reimbursed by Medicare and private insurers, particularly if they improve patient outcomes and reduce hospital readmissions.

3. Expanded Medicaid and Medicare Access, and Federal Policy Developments

• Medicaid Expansion under the Affordable Care Act (ACA): Many states have expanded Medicaid coverage under the ACA, providing broader coverage for low-income individuals. In addition, the expansion has led to broader reimbursement coverage for a variety of services, including those related to diagnostics and medical devices.
• Medicare Advantage Growth: The growth of Medicare Advantage (MA) plans (private insurance plans that cover Medicare beneficiaries) has led to changes in reimbursement approaches. These plans now increasingly incorporate value-based care models and often include coverage for telehealth and digital diagnostics.
• Strategic Impacts of Trump Administration Policies: In 2025, the Trump administration reinstated its focus on healthcare reform through a dual push for price transparency and domestic manufacturing. These initiatives, requiring greater pricing visibility and incentivizing US-based production, may present both challenges and opportunities for device manufacturers.
• Increased transparency will likely elevate the importance of demonstrating value through real-world evidence and cost-effectiveness. At the same time, companies may face rising production costs due to import tariffs. Proactive manufacturers can navigate these changes by integrating economic modelling, refining value communication, and aligning with payer expectations early in the reimbursement process.

4. FDA Approvals and Reimbursement Alignment

• New Pathways for FDA Approvals: The FDA continues to develop new regulatory pathways, especially around innovative digital health tools, AI-driven devices, and next-gen diagnostics. In 2021, the FDA established an accelerated approval process for certain digital health technologies, including mobile health apps and wearables. This is in line with the increasing push to bring devices to market quickly, especially those that can improve outcomes in chronic disease management and aging populations.
• FDA Breakthrough Device Designation: For medical devices that demonstrate a significant advantage over existing treatments or offer new solutions to unmet clinical needs, the FDA’s "Breakthrough Device" designation speeds up regulatory review. This can influence reimbursement, as private insurers and government programs are often more willing to cover devices that have received FDA breakthrough designation.

5. Data and Evidence-Based Reimbursement

• Increased Demand for Real-World Evidence (RWE): Payers are increasingly demanding real-world evidence (RWE) to demonstrate the clinical effectiveness and cost-effectiveness of new devices. RWE includes data from sources like electronic health records (EHR), claims data, and patient registries, helping to prove a device’s impact in diverse patient populations outside of clinical trials.
• Health Technology Assessment (HTA) Adjustments: HTA processes, used to assess a device’s value in terms of patient outcomes and cost-effectiveness, are becoming more comprehensive. With growing emphasis on value-based care, HTA evaluations increasingly include considerations such as patient-reported outcomes, real-world data, and longer-term clinical effectiveness.

6. Insurance Coverage for Mental Health and Digital Therapeutics

• Mental Health Reimbursement Expansion: The increased focus on mental health services and treatments has led to more insurers covering mental health care, including behavioral health technologies like digital therapeutics, which provide non-invasive treatments for mental health conditions.
• Reimbursement for Digital Therapeutics: As digital therapeutics (DTx) for chronic disease management, mental health, and wellness gain traction, insurers are starting to provide reimbursement for these solutions as a part of the broader healthcare landscape. Medicare and private insurers are increasingly including digital solutions for pain management, mental health, and post-surgery recovery.

7. Innovations in Coding and Reimbursement for New Technologies

• ICD-11 and CPT Code Updates: New medical coding systems like ICD-11 (for diseases) and updates to the CPT codes (for medical procedures) are regularly introduced to keep up with emerging technologies. For example, in 2023, there were updates to the CPT code set to reflect the rise in digital health technologies and diagnostic devices. This change affects reimbursement rates and ensures that newer, often more complex technologies, like telehealth and AI-driven diagnostics, can be properly reimbursed.
• AI and Robotics Codes: With the increasing use of AI and robotics in diagnostics, payers are also looking at new coding methods to cover these innovations. The AMA (American Medical Association) has expanded CPT codes to include procedures related to robotic-assisted surgeries and AI-powered diagnostic imaging. These changes influence reimbursement decisions for robotic and AI devices.

8. Addressing Social Determinants of Health (SDOH)

• Inclusion of SDOH in Reimbursement Models: Payers are beginning to integrate the social determinants of health (SDOH) into coverage decisions, which can influence access to diagnostic devices. For example, individuals living in underserved or low-income communities may have more access to devices and care if they are designed to improve health outcomes in these populations, especially through remote monitoring and telehealth.
• Reimbursement for Social Care Devices: As the role of social care in healthcare increases, reimbursement models are slowly beginning to include coverage for devices that address social needs, such as health navigation apps or community-based health programs.

In Summary:

The healthcare reimbursement landscape in the U.S. continues to evolve, with key shifts in response to innovations like telemedicine, digital therapeutics, and AI-based diagnostics. Payers are now increasingly focused on evidence of value and outcomes, especially within the context of value-based care and real-world evidence. Meanwhile, federal policy changes such as renewed price transparency requirements and trade shifts under the Trump administration add new dynamics that companies must be prepared to navigate.

As these trends continue to unfold, companies developing diagnostic devices and technologies will need to align with regulatory updates, coding standards, and payer preferences to ensure successful reimbursement.

We can help your firm demonstrate the added value of your devices, communicating the contribution of improved patient outcomes and care cycle cost reduction, to ensure adoption and reimbursement.

Planning to launch a medical device? We can help you with the research and insights needed to support your go-to-market and reimbursement strategy.

Contact us today for an initial call to explore the next steps and how we can help streamline your process.