Digital Therapeutics Reimbursement Expert Panel Discussion
Panel Overview
This August, ClearView Healthcare Partners had the pleasure of welcoming Laurel Sweeney and Andy Molnar for a panel discussion on the challenges and strategic approaches to secure reimbursement for digital health technologies – thank you to both for participating!
Laurel is the founder of Access Strategies, an independent consultancy, and brings over 20 years of experience in market access and reimbursement for medical devices and innovative technologies, including with Philips. She is also a member of the AMA’s DMPAG
Andy is currently the CEO of the Digital Therapeutics Alliance, with 10 prior years of experience including executive roles in payer and regulatory strategy at digital therapeutic innovators such as Cognoa and Pear Therapeutics
Areas of focus for our panel discussion included the value-add of DTx to the clinical landscape, challenges in securing reimbursement, communicating value to payers and engaging stakeholders to facilitate adoption
Key Discussion Points
Q: What is the key value proposition for DTx?
A: Digital therapeutics can fill in the gaps in the market for traditional medicine and service as an adjunct or replacement for drug therapies. A key value of digital therapeutics is that they engage the patient in self-management of his or her condition. It’s important from both an outcomes and compliance perspective to engage the patient. Bottom line, they empower the patient in a unique way. Some of the emergingareas of focus for DTx include behavioral mental health, gamification of current treatments, adherence to therapies, monitoring of physiological data to drive individualized treatment. For example, we saw a huge spike in telehealth and virtual care due to the COVID-19 pandemic where providers and patients were able to experience remote care and saw its benefits and we expect to see a continuation of this trend, although it might drop off in some cases.
Q: What are some key challenges facing the adoption of digital therapeutics from a payer perspective?
A: In Silicon Valley we’re used to seeing rapid adoption from novel technology products – but in healthcare you don’t get 50% market share in a week. That first whole year on the market still really comes down to generating evidence, usually pilot programs with payers or provider partners. Then in year 2/3 is where you can expand nationally.
A: There are some existing reimbursement pathways that are relevant for some DTx, either direct reimbursement such as the remote patient monitoring or virtual therapeutic monitoring codes, or virtual behavioral health coding pathways. However, we still have some gaps. The CPT code captures physician work time and the expenses associated with delivering a physician service. Many digital therapeutics are used by the patient, with little to no physician involvement. That makes it challenging in the world of CPT. There’s also not a good way to capture the cost of the “thing” – the app, the wearable etc., because the HCPCS II coding system was developed before we knew what a DTx was. They don’t necessarily meet the qualifications for a DME product or other codes such as an orthotic or supply. There’s a lot more we can discuss about this but putting the cost on the patient for clinical DTx products (i.e., not talking about digital health wellness like a Fitbit) is culturally difficult in the US. People expect their insurance to cover it. It also can become an equity issue – widening the gap between haves and have nots.
A: We must think about moving away from a fee-for-service model. Commercial payers have a great deal more leeway than traditional Medicare. So, for example, many commercial payers are investing in DTx and paying for them programmatically (such as per-member-per-month or subscription fees) because they can. There are also payer digital health formularies being created such as Express Scripts or Optum. Finally, select providers are investing in these solutions by creating their own programs. For example, Banner Health recently launched a digital health program that allow providers to prescribe apps and services for remote patient monitoring and other needs. As we move further away from fee-for-service into value-based payment models, we may see more of those kinds of actions because of the perceived value as we talked about earlier.
Q: How do we standardize or bring credibility to the communication of value to payers?
A: Partnering with providers like an IDN can be valuable in building evidence and bringing credibility to your product – but you still have to speak the same language as payers and drive to both net costs and clinical value. Really, what is the core clinical problem you’re trying to solve and how are you doing that? That said,DTx have a unique opportunity to develop real-world evidence to drive real-time outcomes, cost savings, and compliance information, which is valuable to both payers and providers. Take the example of COPD – where using a DTx can help ensure effective management and reduce costly hospitalizations or ED visits.
A: Finding the right partner for a pilot program can be challenging – a given payer/provider group may only be dedicating resources to 2 or 3 indications per year. Chasing those down can be a rabbit hole so there’s a natural point of diminishing returns with further pilots. Remember, the goal of a pilot is to establish preliminary outcomes for a larger trial and gather key feedback for how the DTx may fit into a physician workflow or patient lifestyle.
Q: What’s the role of other stakeholders besides payers in driving reimbursement?
A: Well, we already talked about engaging providers in evidence generation – but it’s also critical to get the buy-in of KOLs, both to drive payer support and also for broader physician adoption. Patient advocacy and industry associations like the DTA can be important in pooling evidence to jointly define codes or regulatory pathways.
A: From an FDA perspective, it seems most favorable for DTx manufacturers if the pathway remains focused on establishing safety, rather than demonstrating specific outcomes. There’s already a software medical device category in the FDA but there isn’t a parallel in the payment codes. This is where CMS/AMA and novel CPT codes come into play, though primarily for inpatient DTx. Moving away from a fee-for-service world where physicians are only reimbursed for activities is significant – otherwise, the current coding system does not adequately address the fact that someone must be paid for the development of the software.
Summary
While there are still challenges to payer perception and the reimbursement infrastructure for digital therapeutics, recent momentum has significantly increased acceptance of DTx’s unique value proposition
Manufacturers entering this space should seek to anchor value communication for their products in terms of clinical outcomes directly linked to a well-defined clinical problem, defining the longitudinal patient journey and impact to total disease/disorder cost, pursue targeted pilot programs with partners to assert credibility and engage stakeholders beyond payers such as KOLs and patient advocacy groups – all of which informs credible evidence that demonstrates incremental value to the financial stakeholder
