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Medicaid Program Pioneers Reimbursement for Prescription Digital Therapeutics

Analysis  |  By Laura Beerman  
   November 22, 2021

"[T]here is no guidebook, there is no blueprint, none of us has ever done this before," says one plan executive.

MassHealth, partnering with Pear Therapeutics, will become the first Medicaid program to reimburse for prescription digital therapeutics (PDT). This first for Medicaid is not a first for Pear and other PDT manufacturers that have pioneered partnerships with multiple PBMs to commercialize digital therapeutics as regulations lag. As vendors, PBMs, and commercial payers move forward, PDT highlights one of healthcare's growing challenges: technological innovations that move faster than the delivery and reimbursement systems needed to fully implement them.

Commercial payers advance DTx

While full implementation of Massachusetts Medicaid PDT coverage awaits final state and federal approval, as well as funding, MassHealth MCO Tufts Health Plan is already planning a pilot of reSET and reSET-O with Spectrum Health Systems, a mental health and addiction treatment provider. Details are still emerging for this commercial population pilot.

Other commercial payers are also laying a DTx framework. A recent Access & Reimbursement survey from Clarivate found that 9 in 10 pharmacy and medical directors said their MCO "either already had a policy in place for covering DTx or expected to have one by June 2021." While the study focused on insomnia, results may be applicable to other conditions given that many digital therapeutics focus on mental, behavioral, and neurological conditions.

"The future of pharmacy is to lean in and step forward and understand that this is new, this is different …" says Snezana Mahon, PharmD, vice president and general manager of Care Solutions Evernorth, the Cigna health services division that also manages the company’s PBM, Express Scripts. Also in conversation with Clarivate, Mahon further states that "there is no guidebook, there is no blueprint, none of us has ever done this before."

PBMs pioneer DTx pathways

Direct contracting with PBMs is another path DTx manufacturers are taking to get their products to market. The leading PBMs—Caremark, Express Scripts, OptumRx—represent 77% of prescription claims managed and are all linked to payers (Aetna, Cigna, and UnitedHealth, respectively).

Clarivate reports that "[p]harmacy benefit coverage tends to be a better fit for a prescription-based DTx … [which] facilitates easier application of member cost-sharing and provides multiple touchpoints for member engagement." Other payers use the medical benefit "for products categorized as DME and those sourced directly from the manufacturer, as well as products used during an office visit and those that require specialist or case manager intervention." Clarivate adds that "plans whose PBMs limit their contracting on the pharmacy side may choose to cover DTx under medical."

Innovating innovation

Risk-based contracts are also finding their way into DTx reimbursement. Pear and Prime Therapeutics have a value-based PDT contract for substance and opioid use treatment. This is a particularly interesting development: that a new therapy would begin its life under advanced payment models as the industry struggles to move to full-risk-based contracting.

In the meantime, be prepared for a flow of "firsts" on DTx reimbursement as each manufacturer with a condition-specific technology contracts with a PBM, payer, or self-insured employer for product reimbursement. Watch also for the tail to continue to wag the dog as federal DTx guidance continues to be delayed.

Laura Beerman is a contributing writer for HealthLeaders.


As digital therapeutic products find their first Medicaid reimbursement, manufacturers continue to lead commercialization.

Payers and PBMs are also forging ahead in the face of federal regulatory delays.

Stakeholders are using pharmacy or medical benefit coverage, depending on therapy type, service delivery complexity, and contracting constraints.

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