Digital Prescription Therapeutics Makers Applaud Highmark Coverage Decision
Highmark Health recently implemented a medical policy stating the insurer will cover digital prescription therapeutics (DPTs) under certain circumstances. The decision is “incredibly significant for our industry,” Akili Interactive Labs chief executive and co-founder Eddie Martucci, Ph.D., writes in an email to AIS, a division of MMIT.
Highmark’s policy pertains to Akili’s EndeavorRx treatment for children with attention-deficit/hyperactivity disorder as well as the eight other FDA-approved DPTs, which are software-based therapies to treat medical and behavioral conditions. DPTs treat conditions such as substance use disorder, opioid use disorder, irritable bowel syndrome and chronic lower back pain.
Manufacturers of DPTs tell AIS Health that some states and a small number of insurers such as Independence Blue Cross, Horizon Blue Cross Blue Shield of New Jersey and Premera Blue Cross have covered DPTs on a one-off basis. However, they say Highmark is the first insurer to cover all FDA-approved DPTs.
The policy pertains to people enrolled in Highmark’s commercial plans and has a few conditions, including that the DPT is used for the approved indication, is prescribed by a doctor for whom the condition covered is within the scope of their practice, and is only used for outpatient care.
“We’re kind of out there being first on the scene,” Matt Fickie, M.D., a Highmark senior medical director, tells AIS Health. “But I think if we do this right, people are going to find value in it and other groups will be pulled along by our experience or by the data they’re given about these types of therapies.”
Reimbursement Still Remains Low for DPTs
Highmark began evaluating coverage of DPTs in April shortly after CMS established a medical code, A9291, for outpatient settings. The insurer plans on using that code as part of its evaluation for reimbursing providers and patients, although Fickie notes CMS still does not “have a pathway to payment” for DPTs. In addition, there is no Medicare benefit category or a physician fee schedule for DPTs, according to a Health Affairs brief published in August.
The brief notes that DPT manufacturers can sometimes secure reimbursement under the pharmacy benefit, but most of that has occurred on individual contracts with employer-sponsored plans. However, those manufacturers consider claims-based reimbursement “a more scalable and repeatable method for distributing these products.”
Reimbursement of DPTs could improve in the coming months and years, as Fickie notes that CMS and the Institute for Clinical and Economic Review (ICER) have set up centers to evaluate DPTs and their clinical benefit and cost-effectiveness.
“I think there’s hope in the community that these move on to become something that can help people,” Fickie says. “There are hundreds of these companies out there….They’re each kind of a little bit different. We’re going to find out what works and what doesn’t work in the coming years. The bottleneck for all of these guys has been payers coming up with a way to pay for them. There’s lots of programmers out there who want to make them [and] there are doctors and other people who want to help solve the problems.”
Dan Mendelson, CEO of Morgan Health, the health care investing arm of JPMorgan Chase & Co., tells AIS Health that getting payers such as Highmark to pay for DPTs should help companies continue to invest in developing these products. Most DPT manufacturers are startups that need to raise tens of millions of dollars from investors, who will be more willing to invest if they see a future where insurers will cover the products rather than have people pay for the devices out-of-pocket as is customary now.
“One of the things that’s good about this is it sends a signal back to the developers of these technologies that if you go through the effort of proving what works, [insurers are] going to consider [reimbursement],” Mendelson says. “They’ve put conditions on it. They’re not going to allow its use in cases where they don’t believe it’s indicated, but I think they’re definitely taking the right first step.”
Mendelson adds: “Just because something has FDA approval should never guarantee that a plan would pay for it and if so, how much. But it should be considered.”
Manufacturers Hope Highmark Decision Paves Way for More Reimbursement
Pear Therapeutics CEO and co-founder Corey McCann tells AIS Health that his company had discussions with Highmark “for quite some time” before the insurer implemented its policy.
In September 2017, Pear’s reSET digital app to treat patients with substance use disorder became the first FDA-approved DPT. The reSET is intended for use with standard outpatient treatment for people with substance use disorder related to stimulants, cannabis, cocaine and alcohol.
Since then, the FDA has approved two other Pear products: reSET-O, which is intended for people with opioid use disorder, and Somryst, which is for people with chronic insomnia. Pear’s apps provide cognitive behavioral therapy.
Pear has coverage for one or more of its products from about 10 states, several Blues plans and SelectHealth, and the company anticipates many more payers to follow suit. Pear, which went public in December 2021 via a combination with a special purpose acquisition company, expects to generate $14 million to $16 million of revenue this year, up from $3.3 million last year.
“I think the Highmark coverage decision is a nice template for other payers,” McCann says. “I think it shows how to provide coverage for our products and the product class.”
He adds: “Suffice to say, there’s a lot of interest across the major payers. When you look at the Highmark decision and all of the decisions that we’ve been bringing to the market, it makes it harder and harder for them to deny care because you start to run into things like mental health parity and ERISA [Employee Retirement Income Security Act] violations. It’s one of many reasons, along with our clinical data, why I believe we’re going to start moving more quickly with payers.”
Raoul Scherwitzl, Ph.D., CEO and co-founder of Natural Cycles, says Highmark’s decision and those from other payers are a long time coming. Natural Cycles has the first FDA-cleared contraception/birth control app, but the company has had trouble convincing payers to cover it even though Scherwitzl argues the product should be considered as a preventive service. The ACA requires health insurers to cover preventive services at no cost to beneficiaries.
Since the FDA cleared Natural Cycles in August 2018, the company has been selling its product over the counter in stores or online. The device costs $100 per year. Scherwitzl says Independence Blue Cross recently instituted a policy to cover Natural Cycles, while one person with Aetna coverage has also received reimbursement for using Natural Cycles.
“Everybody’s going to do [reimbursement] a little bit different, it seems,” Scherwitzl tells AIS Health. “Technically, they should have done it since the moment we got FDA clearance in 2018, but it’s been quite a journey to get them to comply with it. There’s movement now in the space that is accelerating.”
Martucci, Akili’s CEO, tells AIS Health that most people pay out of pocket for the company’s EndeavorRx, which is a video game treatment for children between 8 and 12 years old who have ADHD. EndeavorRx has a list price of $450 per month, but Martucci says the company is offering the product to people without insurance coverage for $99 per month. Providers in all 50 U.S. states have written prescriptions for EndeavorRx, but Martucci writes that “insurance coverage has been a barrier for many patients wanting to access EndeavorRx.”
“Our hope is that this move [by Highmark] is a catalyst for other payers to do what is right for children with ADHD,” Martucci writes. “Lack of broad coverage of DPTs is not only stalling progress across the medical field, but it is a complete disservice to patients who are seeking access to non-drug therapeutic options. We applaud Highmark for implementing this policy, and we hope to see other commercial insurance companies take the same approach, which is very clear cut — they are giving patients access to products whose science has been vetted through the FDA process.”
Contact Mendelson at email@example.com, Martucci via Julie DiCarlo at firstname.lastname@example.org, Scherwitzl via Lauren Hanafin at email@example.com, McCann via Meara Murphy at firstname.lastname@example.org and Fickie via Leilyn Perri at email@example.com.
This article was reprinted from AIS Health’s weekly publication Health Plan Weekly.