Per the Digital Therapeutics Alliance, digital therapeutics deliver “evidence-based therapeutic interventions that are driven by high quality software programs to treat, manage, or prevent a disease or disorder.”  Prescription Digital Therapeutics (PDTs) require a prescription order from a healthcare provider and often provide a continuum of care in the management of chronic disease. The American Psychological Association shows support for this type of care stating that, “They can be used independently or as an adjunct to medications or other therapies to optimize patient care and health outcomes.”

PDT reimbursement lacks clear definition. The Centers of Medicare and Medicare Services (CMS) has been releasing codes, such as Level II HCPCS code A9291, for the streamlining of claims, but federal coverage through Medicare/Medicaid or private payers for digital therapeutics remains elusive. A contributing factor is the uncertainty around the FDA’s ability to regulate these products. “The faster cycles of innovation and the speed of change for medical device software would benefit from a new regulatory approach,” according to an FDA report. Express Scripts has taken steps to offer coverage options via the Evernorth Digital Health Formulary®. This indicates coverage through the pharmacy benefit; however, the HCPCS code also provides an avenue for medical benefit coverage.

Highmark, a payer-provider organization, is the first large commercial insurer to state that they will pay for claims for PDTs with restrictions. Other payers have covered certain products, but Highmark will approve claims for FDA-approved PDTs and cover a growing number with the caveat that they are prescribed as an outpatient treatment for the FDA-approved indication. This is different from Evernorth’s Digital Formulary with Express Scripts, where the coverage is only available on an individual plan’s basis of coverage.  Instead, Highmark is expanding coverage and paying for PDTs that are deemed medically necessary by a provider. The digital therapeutics covered by Highmark, per their statement, are listed below with expanded coverage to other products likely, according to a senior medical director in the system.

Will other commercial insurers follow suit in coverage of PDTs?  Will CMS streamline the process for reimbursement and provide Medicare/Medicare coverage of these products? Those interested in this topic may wish to follow the bipartisan Access to Prescription Digital Therapeutics Act of 2023 (S. 723/H.R. 1458) for updates.

Posted April 2023