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Medicare regulators’ proposal to start paying for some digital therapeutics products created a wave of enthusiasm when it was released earlier this month. Developers of software designed to treat medical conditions have struggled for a foothold in health care in part owing to challenges with reimbursement. So, getting the Centers for Medicare and Medicaid Services to pay for digital treatments is viewed as a pivotal milestone. Comments from key stakeholders about the Medicare proposal probably won’t start showing up in the docket for a few more weeks, but I’ve heard from many industry insiders.
To review, the proposed codes cover FDA-cleared digital mental health treatments that are furnished to patients by providers as part of ongoing behavioral health treatment. The codes allow clinicians to bill for supplying the treatments to patients, as well as to bill for management services, like reviewing data from apps and communicating with the patient. Comments on the policy are due September 9th.
Some high-level takeaways and questions (and if you have more, I’m here to listen):
- Does it matter? There’s agreement that Medicare’s move could be consequential for the nascent sector. Though the proposed codes hone in on FDA-cleared mental health apps, it could be a precursor to broader coverage of digital therapeutics in the future as regulators get more comfortable with the idea and see it in practice.
- What devices are covered? Though the proposed codes appear at first blush to cast a fairly wide net for digital mental health treatment devices, CMS cites the federal regulation that was created for Pear Therapeutics‘ substance use treatment, reSET, when it received De Novo marketing authorization in 2017. Industry folks are unclear whether the new codes cover mental health treatments broadly construed, or only those that use Pear’s device as a predicate for FDA clearance. The latter could limit the potential reach, though, many applicable devices do use Pear as a predicate. (Nixon Gwilt Law wrote about this in more technical detail.)
- Does this lead to coverage outside Medicare? Here’s one theory: If implemented, the codes would lead to adoption of digital mental health treatments by Medicare Advantage insurers that would gain experience and collect data about the products. That could, eventually, lead to coverage by employer health plans.
- Better than RTM? Some wonder if the proposed codes are really different from existing remote monitoring billing codes that enable payment for many of the same products. Indeed, the proposal is based on the existing remote monitoring structures and some digital therapeutics companies have already developed business models around remote monitoring. Still, most of my sources think it’s important that CMS recognize the value of digital therapeutics independent of monitoring, potentially setting the stage for higher payment rates in the future.
- But what will CMS pay in the long run? Though CMS proposed payment amounts for management services, regulators are uncertain about what to pay providers for supplying treatments. Citing a dearth of data, CMS proposed to let regional contractors decide. This is not unusual for a new modality, but given CMS’s past hesitance, people are trying to read between the lines. For example, in the proposed rule, CMS cited an arbitrary online listing of mental health apps to suggest that right now treatments cost between $0 and $140. To some, that does not bode well for future payment rates. There remain questions about how a national payment rate would come about — and whether a national price is even desirable.
- Importance of getting providers involved? Sources said that creating a way for providers to get paid for digital treatments is a very good way to get clinicians to start thinking about how novel treatments fit into their practices. It may even be a good way, I think, to drive better outcomes: We know how tough it is to keep people engaged with digital therapeutics outside of carefully controlled trial settings. Having a provider that’s invested in keeping patients engaged seems like a good way to help patients realize the benefits of the treatments.
Federal health department’s huge data overhaul
This morning, the Department of Health and Human Services announced a major reorganization of offices devoted to data and technology in health care, STAT’s Katie Palmer reported exclusively. Under the revamp, chief offices devoted to technology, data, and AI, will be moved to The Office of the National Coordinator for Health Information Technology, better known as ONC.
The change comes amid concerns grow about artificial intelligence, and cybersecurity threats in medicine and a concerted effort on the part of IT vendors, device companies, and other interested factions to exert influence over how emerging tech is regulated.
ONC, which is responsible for developing and enforcing data standards for health systems, has gained influence in recent years as the role data plays in health care has become critical. The new remit for the office could help bolster oversight of health data and artificial intelligence as well as to streamline the health department’s internal use of new technology.
The new office, which will be headed by current ONC chief Micky Tripathi, will now be known as the the Assistant Secretary for Technology Policy and Office of the National Coordinator for Health Information Technology. (What a mouthful!)
Read more about the HHS reorganization and what it means for the future of health data.
FDA on the hunt for new devices chief
Earlier this week, STAT’s Lizzy Lawrence reported that Jeff Shuren, the FDA‘s chief devices regulator since 2009, would be stepping down. He’ll be replaced on an interim basis by Michelle Tarver, a deputy director at the Center for Devices and Radiological Health.
But in the long-term, who will swoop in to fill his shoes? And what exactly will Shuren get into, given that he doesn’t seem like the kind of guy to retire to a place where you can sit poolside for 300 days a year?
During Shuren’s tenure, FDA’s devices center drastically increased the number of products authorized by the agency and introduced the breakthrough devices program to help make it easier for innovative products to get to market. In recent years, he led FDA’s efforts to regulate AI-enabled medical devices and lab developed tests.
If you know something we should know, reach out to [email protected]. And read Lizzy’s story on Shuren’s departure here.
How does Harris view health tech?
What do we know about presumptive Democratic presidential nominee Kamala Harris’ stance on health tech issues? Not a lot, right now — experts and insiders contacted by STAT largely expect her positions to be similar to President Biden’s. Harris has been the face of the Biden administration at a few different AI events, including former U.K. prime minister Rishi Sunak’s Global Summit on AI Safety last year. On that trip, she announced the United States AI Safety Institute. She’s also secured voluntary commitments from companies including OpenAI, Microsoft, and Google to develop AI technology safely. She also met with civil rights and labor leaders about AI risks.
It’s an open question how Harris’ history of representing Silicon Valley in Congress might factor into a potential presidency, but Transcarent CEO Glen Tullman viewed her record of supporting telehealth as promising. “A Harris Administration would aggressively support digital health technologies as a way to improve health equity and affordable access to care at home,” he told STAT in an email.