Outpatient visit restrictions imposed in early 2020 due to COVID-19 increased demand for effective virtual health care interventions. Telemedicine visits skyrocketed in the first half of last year. However, while federal agencies have taken significant action to shore up telemedicine use, short of a few regulatory carve outs for remote patient monitoring and mental health, digital therapeutics (DTx) have been left by the wayside.
Digital therapeutics, defined by the Digital Therapeutics Alliance as “evidence-based therapeutic interventions driven by high-quality software programs to prevent, manage, or treat a medical disorder or disease,” have emerged as a new therapeutic modality for the prevention, management, or treatment of chronic, behavior-modifiable disease. DTx can act both as monotherapies—often as step one in a treatment algorithm targeting diet, exercise, behavioral health, or lifestyle—and as combination products with pharmaceuticals. These products are currently regulated under the Food and Drug Administration’s (FDA’s) Software-as-a-Medical-Device framework.
While the Centers for Medicare and Medicaid Services (CMS) policy on telemedicine has been a bellwether of change for commercial payers, the agency has yet to develop guidance for DTx reimbursement. For the duration of the COVID-19 public health emergency, the FDA has relaxed regulatory requirements to increase access to digital health products for remote monitoring and the management of psychiatric conditions. However, the absence of an established, repeatable, and scalable path to commercialization and prescription of DTx has bottlenecked broader uptake. Consequently, current DTx evaluation decisions among commercial payers are largely ad-hoc and based on individual priorities.
Modeling DTx coverage policy on international examples, such as Germany’s Digital Health Care Act, in tandem with such prior innovative approaches to US care delivery as Medicare Advantage and managed care benefits, may allow more patients to benefit from this emerging therapeutic modality until Congress acts to approve a dedicated benefit category for DTx under Medicare.
The Growth And Potential Of Digital Therapeutics
Investments in US DTx companies have increased by an average of 40 percent per year over the past seven years, surpassing $1 billion in 2018. Two factors underlie this growth: one, the increased prevalence of personalized hardware and smartphones, and two, the more than 600 peer-reviewed efficacy and effectiveness studies for digital health as a medical intervention. The majority of DTx to date apply counseling approaches—such as cognitive behavioral therapy, motivational enhancement therapy, and biofeedback therapy—into software to manage or treat behavior-modifiable diseases. Additionally, data collected from DTx may be used by clinicians to prioritize outreach, make medication changes, and improve quality of in-person visits.
Administrative And Legislative Proposals
On January 12 of this year, CMS issued a controversial interim final rule, the Medicare Coverage of Innovative Technology (MCIT) coverage pathway (the rule’s effective date is now delayed until at least May 15), that would automatically provide Medicare coverage for devices receiving FDA breakthrough designation for four years. This change aims to address the current nine- to twelve-month gap between FDA approval and Medicare National Coverage Determinations, as well as the inconsistent coverage by local Medicare administrative contractors.
However, this rule change prohibits breakthrough-designated devices without an existing Medicare Part A or Part B benefit category from receiving automatic coverage. As digital therapeutics are a relatively new invention and do not fall under an existing Medicare benefit category, they would be excluded from coverage. A December 2019 House bill (H.R.5333–Ensuring Patient Access to Critical Breakthrough Products Act of 2019)…