Self-insured employers see value in engagement, productivity, and lower health costs. Therefore, they are the ones adopting wellness programs, mental health solutions, and diabetes management – both in-person and digitally. However, there is still is no codified benefit category for digital therapeutics. To this end, many new companies and entrants into the digital health space are working to push legislative efforts with the Prescription Digital Therapeutics to Support Recovery Act. They believe changes to this legislation would provide a precedent for how to approach a broader reimbursement strategy for digital therapeutics.
Medcitynews.com recently published an article called “Digital Health Reimbursement: The Transforming Landscape” that discusses the challenges of digital health innovation including reimbursement by private plans and the future reimbursement for telehealth tools and digital health management.
The article centers around an interview with Chance Scott, Director of Life Sciences at Guidehouse, a consulting firm largely based in the energy, financial services, health, and life sciences verticals. The Arxcel team wanted to point out the sections of this article below that discuss relevant topics to our clinical programs, the future of pharmacy benefits, and the digital age of health management, or you can click here to read the whole article.
1. DIGITAL HEALTH: “In March [of 2020], the government broadened the array of services and codes that are reimbursed and structured them so these services are reimbursed at the same rate as they would be in a face-to-face encounter as opposed to a reduced amount. So, who are the winners and potential losers in this? “Clearly, practitioners are seeing a boon in their ability to expand the types of revenue streams from telehealth,” said Scott. “Providers have the option to waive cost share for these virtual interactions and remote monitoring services and clearly, patients are still getting critical access to care that’s needed during the pandemic. So, I think those two sets of stakeholders have definitely been winners. From a payer standpoint, it’s unclear whether they are really a winner or loser here, but they are going to have to understand the implications around cost containment for their health plans should the pandemic continue.”
When looking at digital health more holistically, commercial plans have more latitude because they’re not necessarily beholden to the dictates of Health and Human Services, Scott observed. He noted that health plans like Kaiser Permanente have created “Digital Centers of Excellence” to understand how they can standardize the way they evaluate, integrate, and pay for digital services. In September, the FDA announced one, to provide technical advice, advance best practices and reimagine digital health device oversight.
2. EMPLOYER WELLNESS: “Employer wellness plans have shown an interest in adopting digital health tools that can help them keep a tighter rein on healthcare expenses and employee productivity by helping staff manage chronic conditions and help staff navigate healthcare options with greater transparency. Scott said that when you think about indications such as diabetes, a lot of the technology aimed at diabetes management and other chronic conditions is being pushed by self-insured employers. “They see value in employee engagement, in productivity, in reducing their overall healthcare expenditures, particularly when they’re fully at risk for those costs. So, you see some of the existing apps today aimed at wellness, mental health, diabetes. It really is about the employer sponsoring that, ensuring that the health plan provides their employees access to these digital innovations. It’s not necessarily the payer going out in front and saying, ‘We’re going to apply this to our entire beneficiary pool today,’ because there may not be enough evidence supporting that. So, you see a lot of the employer group becoming more influential for early access to digital health tools.”
3. WIDESPREAD REIMBURSEMENT: “Healthcare entrepreneurs have to focus on what their business model is and be aware of the changes we are seeing to provide an infrastructure for digital health adoption. The rise of digital formularies is one example of this. They also have to consider how their business model will shape their go-to market strategy. We’re now at a point where the increase in the number of technologies is causing the need to re-evaluate how we pay for digital innovation. Many are betting that the widespread reimbursement of telemedicine services accelerated during the pandemic will continue even after a safe and effective vaccine is available for the virus. It has forced people who had never used the technology to acquaint themselves with this form of access to healthcare. Although that is widely seen as a positive development in the push to expand coverage for novel digital health tools like digital therapeutics, clinical validation is an equally important factor in determining the future of reimbursement for these tools.”
Portions of this article were directly taken from MedCityNews and authored by Stephanie Baum, 2020.