Pittsburgh-based Highmark plans to expand insurance coverage for some prescription digital therapeutics cleared by the Food and Drug Administration, marking a major step forward for app makers in the market.
Highmark, a provider-payer organization, is not the first payer to cover some prescription digital therapeutics, also called PDTs. However, Highmark is the first large commercial insurer to signal it intends to pay for claims for the use of apps that help treat psychiatric disorders and other complex conditions. The company has 6 million members in Pennsylvania, Delaware, West Virginia and New York
“It’s a big deal for the industry,” said Eddie Martucci, co-founder and CEO of Akili Interactive, a company that developed a video game treatment for pediatric attention-deficit/hyperactivity disorder.
The company’s product EndeavorRx, which has been cleared by the Food and Drug Administration (FDA), is included on a number of formularies, Martucci said.
“We've seen other companies included on formularies or being in Medicaid plans but this is a big deal because Highmark is the first large regional that created a medical policy saying, ‘These FDA-approved products are considered medically necessary when prescribed by a doctor on label,' full stop," he said.
He added, “They looked at the FDA process, which is just as rigorous as other medicine, and they decided that was sufficient for their patients to give them access. [Highmark] did the work to create a medical policy that then allows them to give access to their members. I think that's what we haven't seen in the insurance industry.
He added, “Frankly, we've seen a lot of hemming and hawing [from insurers] around new therapeutics, saying, ‘It takes work and we don't exactly know how to create that framework.’ I think Highmark just did it.”
Highmark Health includes payer businesses, including Highmark Health Plans, United Concordia Dental and HM Insurance Group, and a provider business arm with Allegheny Health Network.
The company quietly issued the medical policy in August. News about Highmark's medical policy was reported on LinkedIn two weeks ago. Stat was the first publication to report on the new policy last week.
According to the policy, Highmark plans to pay medical claims only for prescription digital therapeutics cleared by the FDA when prescribed by a licensed healthcare professional within the appropriate medical specialty and used within its approved indications.
The policy names eight products, including Akili Interactive’s EndeavorRx; Pear Therapeutics’ cognitive behavioral therapy (CBT) apps for the treatment of opiate user disorder, substance use disorder and insomnia; a treatment for nightmares paired with the Apple Watch; apps targeting irritable bowel syndrome; and virtual reality-based treatments for chronic lower back pain and lazy eye.
The list of companies covered by the policy will grow and evolve, Matt Fickie, M.D., senior medical director at Highmark, told Fierce Healthcare.
“This is a whole new modality of care,” he said. “If you think about the biggest subjects addressed by these apps, it's behavioral health, and that's where access is our biggest problem. And, here we are pushing behavioral health out to everyone's phone. So that's a lot of potential.”
Six months ago, back in April, Highmark began convening stakeholders across the company, including contracting, benefits, pharmacy and behavioral health teams, to discuss how to move forward in the use of digital therapeutics.
“Through discussion and research, we landed on the FDA standard as, at least, our starting point to try to map this field and we issued a policy,” Fickie said. As part of the work, a multidisciplinary panel of experts completed technical reviews of the products, he said.
“Highmark has been using digital therapeutics in a number of different ways. We have different teams piloting them, we have some creating them. These are important software-based devices. If you look at who is evaluating them, it's CMS [the Centers for Medicare & Medicaid Services], the FDA and ICER [the Institute for Clinical and Economic Review],” he noted. “The pipeline for pushing these into the clinic is well developed at that level. The bottleneck occurs whenever we get to the payment system.”
As Highmark is an integrated healthcare system and a Blue Cross Blue Shield-affiliated health insurer, the organization has a big advantage to leverage the potential of digital therapeutics, Fickie said.
“One big criticism of digital therapeutics is that they work in the clinical trials and then you roll them out in real-world settings and patients don’t use them as frequently as they do in the clinical trials, and so they don't work as well. We’re able to be in close contact with both our providers and our members, and I think that’s one aspect that will make all this gel together,” he said.
Digital therapies steadily gaining ground
Prescription digital therapeutics represent a growing field of health tech innovation, and investors have poured hundreds of millions of dollars into DTx startups. Many of these companies say their products are backed by growing clinical evidence as they work to establish a new standard of care.
But many of these companies have faced significant barriers to more widespread adoption as most major commercial payers have refused to cover them.
“[Insurance] coverage is absolutely critical,” said Ben Lewis, co-founder and CEO of Limbix, a digital therapeutics solution for adolescent mental health. “Knowing that the patients won’t have to pay of out pocket makes it so much easier for adoption. Many patients have a financial burden to access software, and, no matter how clinically effective the therapeutic is, that can be a big barrier.”
Pear Therapeutics had made significant strides in the digital therapeutics space with three FDA-authorized digital therapeutic: reSET for substance use disorder, reSET-O for opioid use disorder and Somryst for chronic insomnia.
The company has been building pathways to reimbursement with commercial payers and state Medicaid plans.
“We had 16 Blues plans provide coverage in the last quarter alone,” Corey McCann, CEO of Pear Therapeutics, said in an interview. “There are about 10 different states paying for the products across a number of different mechanisms.”
SelectHealth, a subsidiary of Intermountain Healthcare, recently signed on with the company to cover its reSET-O digital tool for opioid use disorder.
“I think what you're really seeing is momentum,” McCann said. “That momentum is from real-world clinical data that shows that patients benefit and payers save money.”
He added, “We’ve been able to show safety and effectiveness in randomized clinical trials. And then, thereafter, we’ve been able to show real-world benefits in terms of outcomes and in terms of cost savings in real-world actions. It’s this kind of evidence that's really helped to move payers and then payers move in masses and so seeing other payers move has helped more payers to move.”
Pear Therapeutics had 14,000 prescriptions written for its product in 2021, according to its annual earnings report, and projects 35,000 to 45,000 total prescriptions in 2022, per its second-quarter earnings report.
Martucci said, “A year or two ago, you could make a very real case that insurers had not heard of these types of products or had no idea what these products were or had not done any of the work to get familiar with them or their data.”
Today, Akili has about 1,000 prescribers in all 50 states, he noted. “Payers are seeing the activity in the market and prescriptions coming through and most have an internal strategy to assess digital therapeutics. So that's a positive,” he noted.
But the digital health executive also said he’s frustrated at insurers’ lack of urgency, especially as many of these therapeutic apps could help provide much-needed access to mental and behavioral health treatment options. The U.S. is facing a growing mental health crisis with gaps in access to care and a shortage of providers.
“I think the need has come, frankly, to a tipping point in mental and behavioral health. These products, while they're not going to be the cure for all of these ailments, they serve an important and incredibly unique new option,” Martucci said. “These products, which are now FDA approved, are being prescribed by doctors who say they want to give them to more patients, but they're not accessible because they're not allowed to be covered through insurance carriers.”
Highmark’s new policy offers a blueprint for one approach to covering PDTs.
“Perfection is the enemy of progress. If we wait years to figure out the perfect framework to make these available to patients that means patients are waiting years for these new FDA-cleared products,” Martucci noted.
The industry is seeing wider acceptance of digital therapeutics and product developers expect this to accelerate adoption.
Last year, the American Medical Association’s current procedural terminology (CPT) editorial panel clarified CPT codes for remote CBT monitoring services. That decision clears the way for providers to code for digital therapeutics delivered as part of CBT services.
Proposed legislation that has gained bipartisan support, known as the Access to Prescription Digital Therapeutics Act of 2022, also would expand Medicare coverage to include FDA-cleared PDTs.