Payers seek evidence-based standards for coverage of prescription digital therapeutics

Prescription digital therapeutics (PDTs) deliver clinical interventions directly to patients via software to treat, manage or prevent a disease or disorder. PDTs can integrate with other digital health technologies, medications, or in-person therapies to improve patient health. The high-ceiling field — with a global market value projected to exceed $28 billion by 2030 — targets chronic, behavior-modifiable conditions.

At the same time, however, reimbursement for PDTs remains ambiguous with no current Medicare benefit category or physician fee schedule specifying federal insurance coverage. 

The following factors will influence how quickly PDTs can gain financial footing along similar lines as biomedical therapeutics:

• The Access to Prescription Digital Therapeutics Act, introduced in the U.S. Senate earlier this year, proposes Medicare coverage of PDTs under amended sections of the Social Security Act. The bill calls for establishment of product-specific Healthcare Common Procedure Coding System codes for PDTs within two years of enactment. Meanwhile, the Centers for Medicare and Medicaid Services (CMS) “has gradually been releasing new codes to streamline commercial billing of PDTs but has stopped short of proposing federal coverage,” according to PDT researcher Nisarg Patel at the University of California San Francisco.

• In the absence of federal legislation, state Medicaid plans may offer some form of coverage for PDTs. For example, in March 2022, the Massachusetts Medicaid (MassHealth) program authorized member access to a substance-use disorder PDT without prior authorization or copayment through a designated pharmacy. The PDT manufacturer has contracted with the pharmacy to dispense the PDT and ensure access for MassHealth members.

• Like biopharmaceuticals and traditional medical devices, PDTs must be approved by the Food and Drug Administration. Multiple products have been cleared based on quality measures in trial data and under temporary regulations issued during the COVID-19 public health emergency. Nonetheless, it has not been determined whether PDTs will, at some point, need to be evaluated against conventional therapeutics through comparative effectiveness studies.

Patel predicts that eventual resolution will come through either a new Medicare benefit category or a revised interpretation of existing categories to incorporate digital health technologies. In the interim, payers are likely to push back against generalized PDT reimbursement until evidence standards for coverage can be established and randomized controlled trials can be conducted to demonstrate reasonable clinical benefit.

Frank Irving is a Philadelphia-based content writer and communications consultant specializing in healthcare, technology and sports.