Clarity on Reimbursement for Digital Therapies Could Lead to Greater Adoption of Behavioral Health

Clarity on Reimbursement for Digital Therapies Could Lead to Greater Adoption of Behavioral Health

After years of reimbursement uncertainty, the digital therapeutics industry is beginning to see new clarity.

Over the past year, digital therapies, which are evidence-based treatments delivered through software interventions to treat or manage a condition, have made inroads with commercial insurers and Medicaid.

Earlier this year, the state Medicaid programs of Massachusetts and Oklahoma announced new partnerships to cover certain digital therapies.

And recently, STAT reported that Highmark, a nonprofit health insurance plan, would cover certain FDA-approved digital therapies, making them the first commercial insurers to cover them.

The essence of digital therapies, or DTx, is aimed at treating behavioral health issues. They could potentially offer patients and providers another treatment option. These new developments could lead to more widespread adoption of these technologies and impact the future of behavioral healthcare, industry insiders believe.

“This announcement clearly shows the evolution of attitudes towards DTx, from being considered experimental and investigational to being recognized as a legitimate, safe and effective treatment for patients. [by] increasing access to therapy where they are and when they need it most,” Limbix Chief Medical Officer Dr. Benny Alouf told Behavioral Health Business. “It moves this class of therapeutics from being mass-labeled as uncovered to creating real medical guidelines for approval and coverage. And [it lends] legitimacy to the FDA process, through which these products must pass.

Limbix has created a digital therapy for teenage depression. The Palo Alto, Calif.-based startup has raised $31 million. It has not yet been cleared by the FDA.

Historical repayment challenges

The digital therapeutics industry has made regulatory progress over the past five years. In 2017, Pear Therapeutics obtained De Novo clearance from the FDA for Pear ReSET, a digital therapy aimed at treating substance use disorders.

Since then, dozens of digital therapies have been cleared through the FDA’s 510(K) pathway.

Despite the growing number of new therapeutics on the market, the issue of reimbursement has been one of the most difficult challenges in the segment.

“If it’s not a drug, it’s extremely difficult in today’s world to get widespread coverage for new modalities,” said Eddie Martucci, CEO and Founder of Akili, at The Future of Mental Health conference in September.

Akili is a digital therapy focused on cognitive disorders. It has FDA 510(K) clearance for its video game-like digital therapy to improve cognitive function in children with ADHD. It went public in August through a SPAC merger.

Yet space is attracting the attention of the federal government and the private sector. In April, the Biden administration pushed for new digital therapeutic reimbursement strategies as part of its National Drug Control Strategy report.

“Coverage for the provision of motivational incentives could be considered as part of health plans,” the report says. “This will require accounting for billing codes and defining refund parameters.”

But there is still a long way to go before these technologies are widely disseminated. Until then, some industry players are asking patients and clinicians to put pressure on payers.

“We live in a world where we’re basically forcing patients into the mindset, which we know we’ve adopted here in the United States, of prescribing a pill to treat our problems because we don’t have the choice,” Martucci said. “We talked about the issues of behavioral therapy and access to care. And we have other prescription software treatments that are available now. … We’re basically forcing patients to really have only one option for care, and that’s wrong.

Others say the burden of proving the value of the technology falls on the digital therapy makers themselves.

“We should be able to show incredible ROI which should mean that advertising [payers] fall on their own to order our products,” said Peter Hames, co-founder and president of Big Health, during the panel.

Digital therapy company Big Health’s products include digital therapy Sleepio for insomnia and Daylight for anxiety.

A path to reimbursement

Payer coverage and new billing codes could lead to more widespread adoption of the technology.

In 2021, the Centers for Medicare & Medicaid Services (CMS) added a new Level II Healthcare Common Procedures Coding System (HCPCS) code for “Digital Prescription Behavioral Therapy, FDA Approved, Per Cycle of treatment,” making it easier for commercial companies and Medicaid. payers to cover digital therapies.

“I think this is a huge step forward for space,” Dr. Corey McCann, president and CEO of Pear Therapeutics, said during the panel.

There has also been legislative movement on digital therapy coverage. The Access to Digital Prescription Therapies Bill of 2022 would expand coverage of digital prescription therapies for Medicare and Medicaid beneficiaries.

McCann’s company, Pear Therapeutics, has been a leader in securing Medicaid coverage for its products. In 2021, the company announced that MassHealth, the state of Massachusetts’ Medicaid program, would cover Pear’s reSET and reSET-O digital therapies.

In June, Pear announced a value-based agreement with Oklahoma Medicaid. Pear also works with a number of states to supply its therapeutic products.

“Commercial payers, generally speaking, are lagging behind,” McCann said. “Commercial payers can and will refuse care, and that’s really where we’ve been leaning with states to do this standard reimbursement to then force commercial payers.”

While Medicaid stakeholders may have been an early entry into digital therapy, Highmark’s announcement could be a new chapter for commercial payers. Highmark will cover eight FDA-approved digital therapies.

“Highmark has taken the lead and paved the way for other health plans to recognize these therapies as legitimate, worthy of reimbursement and essential for their members,” Alouf said. “DTxs are evaluated and approved by the FDA through a rigorous process that is no different from other medical devices. This decision signals that this class of devices is finally being recognized for its potential to safely and effectively impact the lives of patients. »

The therapy must be prescribed by a provider “for whom the condition is within their scope of practice”. This may be a doctor, psychologist, licensed mental health social worker, licensed professional mental health counselor or advanced practice provider.

Although it is the first of commercial insurers to cover technology, many in the space see this space as the next reimbursement frontier.

“I would think of the next part of ‘state of the state’ as being around evidence, and that’s where all the players in spatial prescription or otherwise are developing health economic datasets to go to the payers to convince them that there is a positive ROI on integrating these products into their patient populations,” said McCann.

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