policy
Lawmakers push CMS to act on DTx
In a new letter, lawmakers asked Medicare administrators to use their existing authorities to pay for software treatments for psychiatric and other conditions.
For years, digital therapeutics makers have been trying to find a way to have their apps covered for people on Medicare. The biggest stumbling block has been the absence of an existing benefit category for such treatments. While there's proposed legislation that would instruct the Centers for Medicare and Medicaid Services to create a new benefit category, it's stalled in Congress because the bill is sure to cost money and lawmakers would need to find a way to pay for it. The industry sees getting Medicare to cover their treatments as a crucial step toward securing more consistent reimbursement from commercial insurers.
Last year, CMS put out a request for information including several questions around using digital therapies. (Good overview of this here.) Now, advocates want to turn the feedback into action.
In the letter, Reps. Doris Matsui (D-CA), Kevin Hern (R-OK), Mike Thompson (D-CA), and August Pfluger (R-TX) ask CMS to "clarify coding and payment for legally marketed digital therapeutics used incident to a clinician's services and that are reasonable and necessary for the treatment of illness or injury." Here, the lawmakers are essentially asking for CMS to make clear that it can pay for digital therapeutics furnished to patients by physicians. A common analogue thrown out by advocates is the way CMS pays for remote physiologic monitoring services and remote therapeutic monitoring services.
The lawmakers also noted — as CMS did last year — the opportunity for companies whose software relies on a specific hardware product to pursue the established pathway for durable medical equipment. AppliedVR, which makes a virtual reality-based treatment for chronic lower back pain, has successfully pursued this pathway.
M&A
Akili to be acquired for $34 million
Speaking of digital therapeutics companies: Pioneering company Akili Interactive announced it would be acquired for $34 million by a little-known company called Virtual Therapeutics — until last year, Virtual was a subsidiary of UnitedHealth Group. Where is all the money for this coming from? I'm dying to know!
The end of Akili's run as an independent entity was punctuated by epic highs and depressing lows. Founded over a decade ago, Akili made a splash in 2020 when the Food and Drug Administration cleared its video game-based treatment for ADHD. Despite going public, and raising hundreds of millions of dollars, it was unable to find a business model that could generate significant revenues. After a pivot from prescription therapeutics to selling directly to consumers didn't take take off, Akili last month announced it was seeking strategic alternatives. Virtual Therapeutics represents that alternative.
Read my story on Akili's sale to a mysterious company
Artificial Intelligence Insurers say they're using AI — but won't say how
Adobe
Some insurers are bragging that they're investing in artificial intelligence and that it will help "contain rising healthcare costs." In the same regulatory filings, though, some insurers disclose AI as a risk that opens them up to discrimination, regulatory scrutiny, and negative consumer perceptions.
My colleague Brittany Trang asked five insurers about how they're using AI, and none of them wanted to talk to her. This comes as AHIP, the trade group for insurers, told Rep. Ami Bera (D-CA.) that health insurers can can police their own AI models and that it wants "algorithms" exempted from any health care AI regulation.
Patient advocates like the Light Collective's Andrea Downing aren't reassured by the industry's desire to self-regulate: "We don't have voluntary fire codes in buildings or voluntary sanitation," she told STAT.
Read more about what we know and don't know about insurer AI here
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