A new program from the Digital Therapeutics Alliance and DirectTrust is betting yes.
Healthcare’s acceptance of digital therapeutics (DTx) continues to be a long and winding road. Two organizations hope to change that. DirectTrust and the Digital Therapeutics Alliance (DTA) are creating an accreditation program for DTx applications and platforms. The program will independently evaluate DTx products for their efficacy, and for data privacy, security, transparency and interoperability.
These characteristics are key for DTx regulatory approval (when required) and for another kind of approval: that of payers. DTx requires confidence: that it can improve outcomes as well or better than traditional therapies and thus be worth including in treatment recommendations, benefit designs, formularies and reimbursement.
DTx accreditation program details
In the new accreditation program, DirectTrust will administer and the DTA will develop the DTx evaluation criteria.
DirectTrust — a non-profit alliance that develops, promotes, and helps enforce healthcare data rules and best practices — already offers DTx evaluation services but is expanding them for the new accreditation program.
“This collaboration will add to DirectTrust’s growing suite of programs designed to assess the diverse digital health app and platform market,” said Scott Stuewe, DirectTrust President and CEO. Accreditation assessment will include data privacy, security, transparency — as well as interoperability to create “effective, scalable [DTx] connections to national health networks using the FHIR standard.”
The DTA is a non-profit trade association that promotes DTx understanding, adoption, and integration in healthcare.
“As the digital therapeutics industry grows, an increasing number of U.S. clinicians, provider systems, health plans, employers, and patients are evaluating how to best incorporate DTx products into their care plans to provide the highest quality of care,” said Andy Molnar, CEO of the DTA, in the program press release.
Making these decisions requires regulatory and reimbursement support.
DTx evolution: Approval and payment
Just as regulatory and reimbursement changes supported telehealth expansion during the pandemic, DTx products and developers need these tools to grow and scale.
Regulatory: Not all DTx products require regulatory approval. For those that do, the U.S. Food and Drug Administration (FDA) offers multiple pathways to demonstrate safety and efficacy, with the 21st Century Cures Act helping to further speed review. HIPAA and theThe HITECH Act govern most but not all DTx data privacy, security, and transparency requirements.
Reimbursement: “Yes, but limited” is how the DTA describes the status of most DTx reimbursement — when it occurs at all. Among public payers, Medicaid and Medicare Advantage offer more flexibility than traditional Medicare while employer-sponsored coverage requires negotiation.
According to BGO software, the FDA approved 50% more digital therapeutics in 2023 than in 2022.
There have also been setbacks and advances. Pear Therapeutics, one of the most promising DTx companies to emerge, declared bankruptcy in 2023 — just two years after going public with a $1.6 billion valuation and after securing multiple Medicaid contracts. Conversely, the Centers for Medicare & Medicaid Services (CMS) approved a new reimbursement code for AppliedVR’s DTx product that combines virtual reality hardware and software and likely helped expand the company’s partnership with the Veterans Administration.
Overall, digital health investment has cooled since the pandemic due to continued economic uncertainties, but as any private equity firm will tell you: there is a lot of dry powder in search of valuable investment. Could accreditation make DTx a stronger bet?
Why it matters: Trust and economics
The DTA’s CEO Molnar continues: “With an overwhelming number of products touting a wide range of clinical rigor, it is critical that we set a high bar to build trust.”
Efficacy is one hurdle. Providers and payers must have confidence that DTx options are as good as or better than or a worthwhile companion to traditional treatments.
Another hurdle is sustainability: Does DTx not only demonstrate but sustain outcomes in a way that makes it a sound investment? That answer will vary — by condition and treatment, by product and business, and by payer.
All of the above impact payer DTx decisions: Whether to cover it, how to cover it (medical or pharmacy benefit, formulary placement), and how to pay for it.
Will DTx accreditation matter?
Bigger changes must occur for DTx to become more integrated into healthcare’s delivery system and reimbursement framework. Is accreditation one of them?
As a baby step, maybe. Accreditation does lend credibility, particularly to new directions and initiatives. For example, there's the NCQA’s newer Health Equity Accreditation (HEA) and HEA Plus programs for health plans and health systems — designations that reflect an organization’s ability to create a health equity culture, to collect vital race, ethnicity, and language (REaL) data to support patients’ needs, and to identify equity needs overall.
Accreditation signals that key frameworks are in place that support strong healthcare practices and continuous improvement. The DTA and DirectTrust hope that accreditation will achieve the same for digital therapeutics.
64% of providers agree that health plan data exchange is "very important" to VBC success
33% of providers and 25% of plans, however, believe that current data exchange helps them identify care gaps "very well."
The state of VBC
The Azara Healthcare report defines VBC goals and progress as:
Expansion of healthcare coverage
Implementation of EHRs
Transition from FFS payments
Reductions in healthcare spending
Azara gives the first two goals the “green light,” citing a 92% healthcare coverage (Medical Economics) and 96% hospital EHR adoption rates (HealthIT.gov).
The shift from FFS reimbursement and reduced spending don’t fare as well. Here, Azara notes in its report that VBC uptake “has been slower than the market expected” — despite the 50+ alternative payment models that CMS has tested over the past decade — and has not curbed healthcare spending increases despite a mutual interest by providers and payers to reduce total cost of care.
Consolidation hasn’t curbed costs — what will?
To reduce spending, the Azara report notes that the health plan and provider strategy has been “to get bigger” through consolidation but that this strategy “does not address the underlying challenges of shifting to value-based care—nor does it necessarily streamline operations as expected.”
If consolidation hasn’t worked, what will? Just as there is lack of trust between providers and plans, there is also lack of agreement on how to accelerate VBC, including their biggest obstacles, who benefits most from VBC, and again, lack of trust.
First, the Azara report notes that “[p]roviders and health plans share different views on their core challenges:
Providers cite lack of buy-in (64%), care coordination staff (58%) and care management staff (53%) as their top challenges
Health plans rate lack of provider engagement (71%), member acceptance of narrow networks (47%) and market forces (47%) as their main obstacles
Lack of care coordination and management staff are where plans and providers are most closely aligned but the gap is still wide.
Lack of VBC buy-in is followed by perceived lack of benefit, particularly by providers. Only 19% of providers believe they benefit most from VBC versus the 58% who see health plans as the biggest VBC winners. Health plans agree, with 62% believing they benefit the most.
Both parties believe that they benefit more than patients or members. 50% of providers believe their patients benefit most from VBC, while 68% of health plans believe their members do.
For providers, the lack of payoff contributes to lack of trust. “Providers are over
3 times more likely to report little to no trust in health plans (57% of respondents) than health
plans are to report low trust in providers (18% of respondents),” Azara reports.
In addition, both parties cite very little improvement in their trust levels over the past two to three years, with 52% of providers and 47% of plans reporting no change.
Lack of trust but not lack of agreement
“When we looked more closely at the pain points and goals of health plan and provider leaders, one common theme emerged: effective, transparent data exchange and integration,” notes that Avalere report, adding that “because this integration inherently involves both parties, it’s a worthwhile place to begin untangling distrust.”
Some 61% of providers and 47% of health plans cite lack of data integration as their biggest VBC implementation challenge. Plans and providers are matched (47%) in their belief that data infrastructure to support whole-person, longitudinal care is lacking. Interestingly, both stakeholders also cite lack of patient/member engagement as a challenge: 31% by providers, 44% by plans.
As for data exchange, identifying and closing care gaps was seen as the primary benefit. Neither providers nor plans believe that current data exchange with one another helps them with these gaps. The stakeholders differ on other goals that data exchange can solve, with 67% of providers wanting to use data to identify high utilization patients versus the 50% of health plans who are seeking better primary and behavioral health integration.
Both parties are motivated to overcome these challenges, with the Azara report concluding:
“Providers and health plans are at a tipping point where the incremental shift toward VBC is poised to accelerate. More VBC contracts alone are not going to move the dial when it comes to delivering more value for providers, health plans, and patients. Moreover, when it comes to perceiving that value, providers need to feel more trust in health plans (and to some extent, vice versa).”
“If transparency is one of the key principles to building trust, then transparent, effective data exchange is a specific, measurable way for health plans and providers to start collaborating more effectively.”
A provider study highlights 2024 revenue cycle challenges and opportunities and payers are in the cross hairs.
Their mind’s on their money and their money’s on their mind — a/k/a physician practices and their revenue. In a recent survey, practices reported they spend 41% of their time, nearly half of every day, thinking about revenue cycle management (RCM).
Other than the obvious reason of getting paid: Why? The same survey spotlights the challenges and opportunities: from “shifting payer requirements” and a “fragmented claims management process” on both sides to the need for streamlined automation powered by, you guessed it, AI.
The survey in question —The State of Payer Reimbursement in 2024: It’s Time to Stop Living in Denials — was commissioned by Encoda, a claims and denial software vendor, and conducted by healthcare consultancy Sage Growth Partners. The survey included 84 practice leaders and administrators from single- and multi-specialty practices ranging from 10 to 200+ physicians.
Level setting: The state of revenue cycle in 2024
The Encoda-Sage survey notes that providers are meeting financial and workforce shortages by “going back to basics” and doubling down on RCM. It’s apparently a good time to refocus. Among practice personnel:
Only 25% are “confident they’re receiving every dollar they’ve earned from payers through their medical billing process”
Only 31% “feel strongly that they have the data insights needed to identify patterns in claim denials
Some 25% think they spend too much time on RCM issues
“With shifting payer requirements and other challenges impacting returns, it’s no wonder leaders are looking for ways to optimize their financial operations,” said Lisa Taylor, CEO of Encoda, in the survey report press release.
But how to optimize? How much money is left on the table from unpaid/underpaid claims and inefficient claims management? And are health plans the only reason why?
The best it can be? Attitudes toward current reimbursement processes
Survey respondents repeatedly state that payer rules present the greatest challenge to managing revenue and that it’s increasing.
“Changing payer rules (62%) and difficult payer relationships (45%) were far and away the top two challenges that respondents named when it comes to managing revenue. Furthermore, for the 44% of respondents who said their ability to manage and collect revenue over the past three years has gotten harder.”
When payer rules change, practices must update their practice management systems and workflows to maintain automation and efficiency.
Other reimbursement challenges that impact automation and efficiency include data deficiencies and claims denial mismanagement — on both the payer and practice side.
Yes, providers cite payer rules and relationships as well as a lack of payer data transparency. But the report’s top reasons for claim denials aren’t limited to health plans.
The root of the issue: Unpacking claims and denials
In the survey, practices identified the top five reasons for denials:
Duplicate claims (30%)
Lack of coverage (28%)
Missing data (27%)
Coordination of benefits (23%)
Timely filings (22%)
Providers may be frustrated with payer denials but most of the top five reasons track back to practice management.
Once a claim is denied, however, reversing the denial and securing reimbursement is challenging for survey respondents:
55% claim that > 75% of their denied claims are followed up on, but . . .
73% said that 75% or less are paid when resubmitted with . . .
25-50% of resubmitted claims “going nowhere.”
Time’s up: What’s next for RCM and practice management
Practices are looking at multiple solutions to address claims errors, denials and impacted reimbursement and revenue.
The Encoda report notes that current claims submission methods leave dollars on the table because claims and denial processes — and the tools and workflows to support them — are lacking. The report adds: “Solutions that employ automation and AI will be critical to updating today’s RCM processes to help ensure practices get paid more efficiently and accurately from the payers.”
Some 51% of survey respondents were comfortable exploring AI to increase efficiency and automation in the claims and denial process and thus revenue recognition. Specific focus areas included:
Using scrubbers to validate claims pre-submission and prevent/reduce problematic claims
Focusing billers on problematic claims only increase efficiency and speed payment
Having a practice management system with multiple capabilities — ranging from denial, revenue cycle and claims management to data extraction, analytics and reporting
Having a system “with a single interface to be able to work all claims in one work queue”
From these findings, Encoda concludes: “It’s clear—current solutions for maximizing payer
reimbursement are falling short . . . However, today’s new technologies have been proven to streamline billers’ work and increase automation and transparency, while allowing practices to accomplish more with less.”
“In other words, practices that don’t settle for the current fragmented set of tools will be able to cost-effectively collect the most revenue in the shortest time possible.”
The medical leader details how one payer practices utilization management.
For our series The Exec, Dr. Cathy Moffitt — SVP and Aetna Chief Medical Officer at CVS Health — talked 21st century utilization management with HealthLeaders. The conversation included what UM involves, how it’s changed and how specifically it’s practiced at Aetna, a CVS Health company.
HealthLeaders: What is the role of utilization management in the healthcare delivery system?
Dr. Cathy Moffitt: I believe that utilization management absolutely has its place in securing the right care at the right time, for the right reason. My department is really guided by the Quintuple Aim — health equity and workforce well-being are our North Stars in addition to quality, experience, and cost. We all have a responsibility to be mindful of the enormous cost of care, especially low value or unnecessary care.
HealthLeaders: What are some UM examples that demonstrate how Aetna helps members receive the right care at the right time?
Dr. Moffitt: This is something I'm passionate about. I have been in the payer space now for more than 20 years, and I spent a lot of those years as a medical director actually reviewing utilization cases on a daily basis. I can give you a number of examples where we have really enhanced the quality of the care.
Let's focus on member experience. As a medical director reviewing cases for medical necessity on almost a daily basis, I found opportunities to communicate with the treating physicians. I remember a case where our member had a gastrointestinal bleed with coagulation levels that were abnormal. The patient had been in the hospital for a urinary tract infection, and they were given Ciprofloxacin at discharge which is usually a good drug for UTI.
The problem was, they were also on Coumadin, and there is a drug-drug interaction between Coumadin and Ciprofloxacin. As an infectious diseases doctor. I looked at that and immediately said, Oh no! I reached out to the prescribing provider and rather than receiving it as an annoying call from a payer, he was extremely grateful.
HealthLeaders: Talk more about the payer role in this . . .
Dr. Moffitt (continuing from above): Those are the kinds of things where we lean in, in the interest of the member and really try to enhance safety and improve quality . . . We don't practice medicine, and we don't directly give medical advice, but we're in a situation where we can help point out perhaps some care opportunities through that experience.
In the broader sense, utilization management does allow us to look at the case holistically: Does this person need discharge planning? Do they need home health? Do they need durable medical equipment to go home? Do they need care coordination? Do we need to refer them to one of our complex care managers? And if we weren't there to do this in real time . . .?
A lot of utilization management occurs historically post review, post service — which doesn't give you that sweet spot, that magic moment where you can get in there and get involved to help members receive appropriate care. A lot of people would not receive real-time care coordination [or] receive navigation services that we feel that we are able to provide . . . So rather than a retrospective review, pre-certification or pre-service authorization, we feel, enhances the safety and the quality of the care.
HealthLeaders: What are the components of Aetna’s specific approach to UM?
Dr. Moffitt: Overall, we feel that we bring the best medical evidence and clinical leadership that we can. During the decision-making process, our medical directors are not thinking of cost; they are only focused on whether something is medically necessary and in the best interest of the member. That is something that we do rigorously.
In terms of expertise, every medical director who renders a decision at Aetna is board-certified, currently and continuously, and in an ABMS or AOBMS medical specialty. We also have a number of subject matter experts who are specific to things, like spine surgery.
We also focus on evidence-based medicine. When a decision is truly aligned with the best medical evidence, we are able to render a determination that this is safe, effective for the member, and it won't be deleterious to them.
Finally, there are our regulatory, policy and research efforts. We do endeavor to help members receive appropriate care. In addition, healthcare spend is at least 72.3% of the country's gross domestic product. I think we have a role there, but the way we do is to look very, very diligently at the clinical evidence. We have over 800 clinical policies that we rigorously maintain. We update at least annually with peer-reviewed journal articles and the standards of practice, both regionally and nationally.
HealthLeaders: How has payer UM evolved?
Dr. Moffitt: [speaking to transparency and communication] We are very committed to transparency with both our providers and our members about the evidence that we bring to the decisions that we make. All of our policy bulletins are publicly available. They're published on the internet and anyone who needs to look at one can pull one out in just a moment and look at the standard evidence base that we are using to make decisions.
I think we are also working very hard in the industry to make sure that not just providers understand this, but that our members do too. We're constantly looking for opportunities to communicate our decisions to members. Clearly and transparently to help them get the best understanding of this and the best path to care.
HealthLeaders: How are you leveraging technology, including AI, to execute your UM strategy and serve members?
Dr. Moffitt: First, we are adamant that we never automate medical necessity denials. Any denial that comes through is always personally reviewed by a board-certified medical director. The only exception for medical necessity is an administrative denial for lack of information.
We need to optimize the experience that both providers and members have as they’re going through that process. We are looking continuously at ways to improve that experience through more automation of approvals. Things that can be approved, we are working diligently to try to make sure that more and more of them are approved and that providers for those services can go on onto their provider portals, get the necessary information, and receive an approval in real time. That is a very important aspect of optimizing the utilization management process.
By the end of the year, our intention is to automate about 30% of the services that come to us.
Here, using our historical data helps us understand when services are submitted but rarely denied. We call this provider differentiation, finding those providers who are aligned with the same medical necessity clinical evidence that we are using, which is standard evidence.
HealthLeaders: Provider differentiation and things like preventing negative drug interactions seem very relevant to not only UM but also to value-based care . . .
Dr. Moffitt: As someone who has been in this industry for over 20 years, I believe with all my heart that the best way to line up all of the priorities — cost, quality, access, equity, and workforce — is to have meaningful engagement with providers.
This is not idle theory and at Aetna, this has been proven out in a number of ways.
Dr. Moffit provided the following statistics for members under the care of VBC versus FFS providers in 2020:
57% more members achieved blood pressure control
8% fewer hospital admissions for commercial members
49% more diabetic Medicare members achieved HbA1c control and 7% had fewer hospitalizations
These are meaningful, meaningful tools that both payers and providers believe in, and we are very committed to expanding.
Specialty behavioral health practices will be incentivized to coordinate comprehensive health.
The CMS Innovation Center will soon issue a Notice of Funding Opportunity for its new Innovation in Behavioral Health (IBH) Model. First announced in January, IBH represents multiple firsts:
The first CMMI payment model that targets BH/SUD
The first to focus on these populations in Medicaid and Medicare
The first to put specialty BH providers in charge of integrated care teams that deliver not only BH/SUD but physical health services
The IBH Model: Key Details
CMS designed IBH to deliver care that is comprehensive and integrated, patient-centered and whole-person.
What: Per a CMS spokesperson, IBH will focus on improving quality of care and outcomes through interprofessional care teams that will integrate services and bridge the gaps between physical and behavioral health. IBH also supports specialty BH practices on the path to accountable care.
Who: IBH stakeholders include:
Providers — Specialty BH practices that deliver outpatient services
Payers — Up to eight State Medicaid agencies and their MCO or related partners
Patients — Medicaid and Medicare members with moderate to severe BH and/or SUD conditions
When: Announced Jan. 18, 2024, CMMI will release the IBH funding notice this spring and begin the eight-year model this fall.
The Beginning Of Bi-directional Care?
For decades, PCPs have played a role in patient mental health: “What’s going on? How’s your stress? How much do you drink?” The answers might generate a referral — from primary care to behavioral health.
The IBH model flips the script, allowing BH providers to take the lead and:
screen and assess patients for comprehensive needs
treat select health conditions and health-related social needs (HRSN), in addition to BH/SUD, within scope of practice
refer patients for added needs and monitor overall health/HSRN status
develop a health equity plan to address health disparities with community partners
expand HIT to improve data sharing and quality reporting
These services reflect IBH’s four program pillars — Care Integration, Care Management, Health Equity, and HIT — and its “No Wrong Door” approach for patients.
The CMS spokesperson added: “Since individuals with moderate to severe behavioral health conditions may already visit a behavioral health setting, the behavioral health practice will facilitate close collaboration with primary care, other physical health providers, and health-related social needs partners to support whole-person health.”
These providers will include PCP/SCP practices, Community Mental Health Centers, opioid treatment programs, and safety net providers.
Payers: The Changing Role of Medicaid and Medicaid MCOs.
CMS will choose up to eight state Medicaid agencies for IBH. They in turn will choose their Medicaid MCO or related partners to operationalize the model:
select, manage and support BH provider networks
build capacity (staff, HIT, practice transformation)
recruit patients
implement new payment models
improve data and analytics
While many of these are fairly traditional health plan activities, IBH is another example of Medicaid MCOs being asked to do more toward healthcare’s Quintuple Aim: improving patient cost, quality, experience and equity along with workforce well-being. And for very good reason.
IBH’s Big Why
Per CMS, Medicaid and Medicare members have higher BH/SUD prevalence, worse outcomes and care experiences, and more preventable utilizations and premature deaths:
25% of all Medicare enrollees experience mental illness
40% of adult Medicaid enrollees experience either mental illness or SUD
Higher-than-average SUD rates among both Medicaid and Medicare enrollees
Medicaid and Medicare members with BH/SUD conditions also experience more stigma. This can deter care for not only mental but chronic physical conditions like diabetes and heart disease. Perhaps that’s why nearly 50% of all Medicaid spending, per CMS, is for BH and/or SUD conditions.
An Interesting Footnote
Despite the obvious toll, human and financial, MH and SUD remain healthcare’s “ugly step-sisters” — a quote from the 2023 Inspire Recovery conference where former Rep. Patrick Kennedy called for a federal BH/SUD payment model and panelists noted: “We have an opportunity to change the entire system.”
A year later at that same conference, CMS presented details on IBH. There was also a familiar refrain: the only way to make BH/SUD progress is through reimbursement. The Innovation in Behavioral Health Model provides funding and incentives to make progress.
For HealthLeaders, a CMS representative noted: “[S]pecialty behavioral health practices have had limited opportunities to participate in value-based care . . . By the end of the model, we expect that practice participants will be equipped to engage in more sophisticated alternative payment models.”
These limits have long been the case and not only in VBC. While digital mental health innovation abounds, it has focused more on treatment for anxiety and depression versus conditions like bipolar, dementia and schizophrenia.
But things are changing — and specialty mental health providers may take the driver’s seat.
"Given concerns that telemedicine's convenience will lead to more visits, the relatively small increase in visits that we observed was somewhat surprising."
The Impact Of Telemedicine On Medicare Utilization, Spending, And Quality 2019-2022
While telemedicine use has fallen, rates through 2022 are still substantially higher than pre-pandemic. Has telehealth’s growth increased healthcare service utilization and spending overall, or lowered quality? What policy makers have feared isn’t bearing out, not according to a new study published in Health Affairs. The study involved traditional fee-for-service (FFS) Medicare beneficiaries and their use of health system telehealth services.
Some temporary pandemic-era waivers that increased telehealth adoption have ended while others remain. Select Medicare expansions will end on Dec. 31, 2024, unless Congress extends them. Policy makers want to know if telehealth utilization will negatively impact healthcare quality and cost long term before making permanent coverage changes.
While a new study showed increases that were relatively small, the authors note that future impacts could change as telehealth technology, optimization, and patient demand shifts.
Study definitions and methodologies
The study used Medicare data from more than 5.5 million patients assigned to one of 576 health systems. The researchers focused on systems because they tend to make telemedicine investment and deployment decisions at the organizational level.
The study divided these systems into quartiles, comparing high-telemedicine health systems (health systems in the highest quartile of telemedicine use) with low-telemedicine health systems (those in the lowest quartile of use).
Other definitions include:
Health system: “A jointly owned or managed group of provider organizations . . . with at least one acute care hospital, ten primary care physicians, and a total of fifty physicians.”
Patients: FFS original Medicare beneficiaries continuously enrolled between 2019–22 who also had a 2019 primary care visit.
Outpatient telemedicine visits: Those received in clinics and outpatient hospital settings.
“Surprising” results in utilization and cost
Compared to low-telemedicine health systems, patients of high-telemedicine health systems had “modest” increases in office visits, care continuity, and prescription drug adherence; fewer ED visits; no differences in testing or preventive service; and a small spending increase due largely to inpatient services and drug costs.
Specifically, and compared to “low” systems, “high” systems annually had:
more telemedicine visits per person: 2.5, representing 26.8% of visits, versus 0.7, or 9.5% of visits;
more outpatient visits (telemedicine and in person): 2.2%;
less non-COVID ER visits per 1,000 patients: 2.7%;
higher per-patient spending: 1.6% or $248; and
better metformin and statins adherence.
The conclusion? “Given concerns that telemedicine’s convenience will lead to more visits, the relatively small increase in visits that we observed was somewhat surprising.”
The authors propose several reasons — e.g., limited health system capacity to expand services; lower patient demand due to access barriers and skepticism. They also do not rule out more significant impacts in the future.
Future impacts: Regulations, technology and demand
Policy makers want a greater long-term understanding of telemedicine’s impact on overall cost and quality but are willing to tolerate small spending growth.
Small growth was among the study’s main findings, with the study authors: “Whether our findings support or refute these concerns hinges on interpretations of the estimated spending impact (a 1.6 percent relative increase) and the clinical benefits of the changes we observed in visits, care continuity, and adherence.”
While adding that telemedicine’s impact “could change as technology improves, health systems optimize telemedicine services, or patient demand grows," the study suggests that “it will be difficult to justify a return to restricting telemedicine payment in Medicare.”
MCO collaboration and value creation were a focus of the second annual Inspire Recovery conference.
"When you are addicted to fentanyl, you want it seven times more than you want water when you're hydrated." This hard reality is but one story of substance use disorder (SUD), spotlighted at the 2024 Inspire Recovery conference on Apr. 3 in Nashville.
Addiction amplifies everything that is already hard about being human: knowing our worth, respecting it in others, and relating to one another from a place of similarity versus difference.
What role does managed care have to play in the SUD epidemic? Especially for Medicaid members in particular, for whom low income, social needs, and addiction are nothing less than a perfect storm?
"Medicaid MCOs are faced with trying to balance the continued push for greater treatment access and fast-rising behavioral health costs that can negatively affect Medical Loss Ratios, notes Carter Paine, CEO of Wayspring, presenter of the Inspire Recovery conference.
"This type of environment makes it increasingly ripe for value-based providers to work with health plans."
Or as one conference panelist put it: "Have you called your managed care company today? Anytime there is a barrier or obstacle to remove, please tap into managed care. Please use the resources available."
When a provider or patient does call their managed care company, what are they likely to hear?
Money and stigma
There was a common refrain at Inspire Recovery: The only way is reimbursement.
Carpenter helmed a session on the role of criminal justice partnerships to support SUD needs.
"Giving providers the flexibility to help drive recovery is important. Different reimbursement structures with payers are what can help that happen," said Collen Nicewicz, CEO of Groups.
This linked to another important conference theme: the need for payer "co-opetition," the cooperation and competition that payers must demonstrate to meet the industry's biggest challenges.
Conference panelists identified three factors that strengthen both payer co-opetition and proprietary considerations: the importance of the public health lens, a market's maturity, and — again — the role of reimbursement.
"When there are quality withholds, you have to have MCO collaboration," noted Dr. Madelyn Meyn, Executive Director and Regional CMO for Aetna, a CVS Health Company. "If there are repercussions, then everyone stands to benefit."
So when is it not about the money in SUD? When people don't take it.
"Medicaid expansion has been a godsend to people who need access to benefits and treatment," said Wayspring CEO Paine. He marveled at the states that do not take advantage of this "90% funded insurance pool from the federal government."
There are risks to making progress and innovation dependent on reimbursement. Similar dependencies impact the stigma around SUD patients and treatment.
"In this day and age, saying we can't do something because of stigma just isn't good enough."
This from Dr. Tom McLellan, founder of the Treatment Research Institute.
McLellan's statement is especially true where stigma is not only perpetuated but codified.
"The industry tends to create policies that actually create stigma," noted Aetna's Meyn, who cited practices around Medication Assisted Treatment (MAT) for substance use.
MCO collaboration and value creation in SUD
The challenge with SUD progress is that everything is the key.
"When we're not managing SUD well, it spills back into physical health. Utilization creeps up because we don't have all the levers we need to manage the continuum of care."
Corey Ewing, CEO-WellCare of Kentucky, added: "If you're not addressing a member's immediate needs, you can't engage in a discussion about SUD treatment."
Dr. Meyn with Aetna noted another important first.
"Patient identification is the most important thing, with provider assessment and support."
Providers are the next "first."
"Providers are the key to engagement, innovation, and reimbursement," Meyn added, acknowledging that SUD progress is "multifactorial, also involving payers and SDOH."
The last "firsts" combine all of the others: the importance of integrated care — medical, behavioral, SUD, and social — and of incentives to drive stakeholder engagement.
"The goal is to reward providers for creating better access, outcomes and value," noted Wayspring's Paine.
'There's a lot of meat on this bone'
What is true for SUD progress is true for value-based care (VBC): everything is key.
But how do you deliver value when you don't know how to define it or measure it, how to declare success or identify needed improvements? These questions — and the lack of evidence-based medicine (EBM) and common metrics — led to a common refrain on VBC in the SUD field: "There's a lot of meat on this bone."
"It is possible to weed out the bad actors in a fee-for-service system." This from Beth Mason, Chief Customer Officer at Wayspring. "But it's also difficult to define an SUD episode, to define success from the data, and to define SUD VBC measures and outcomes."
"You really have to measure success one member at a time," added WellCare's Patel, noting that flexibility, variability, and support are also important.
So is the role of utilization management, provided it helps not hinders.
"Without prior authorization, there is no forced conversation between the provider and the payer," said Mason.
Patel added: "We want to see utilization can come down, but not all utilization is the same. A patient has to settle down neurologically before peer support can work."
The CMO termed this the "sequencing of treatment": see the person, stabilize the person, support the person. "That's what we look for in a value-based model."
Defining traditional VBC in terms of episodic, primary care-based metrics, Patel stressed: "That can't work for SUD. We're trying to enable teams to think more broadly. It's not just about length of stay. Are patients maintaining their care or relapsing?"
"You have to look at the big picture. Success doesn't come in the first year of a VBC agreement."
Perhaps the best summary of stakeholder roles in SUD treatment came from Dr. Jim Casey, Statewide Director of Behavioral Health Services, Tennessee Department of Correction.
"We're going to get there, just not as fast as we'd like."
Meet the organizations that helped bring substance use disorder privacy and consent into the 21st century.
Until February 2024, the Code of Federal Regulations Section 42 Part 2 required patients receiving SUD care to provide written consent for the use and disclosure of their treatment, payment, and health care operations information (TPO) for every service, every time — an added burden for those already in pain.
HealthLeaders interviewed Maeghan Gilmore, Vice President of Government Affairs-ABHW and Chairperson for The Partnership. In the two months since the Part 2 rules were finalized, ABHW and The Partnership have assessed the impact on healthcare stakeholders and the road ahead.
What is new about Part 2?
The final Part 2 rule allows patients to provide a single consent for TPO related to their SUD while also protecting their privacy.
“ABHW had this as a policy priority for a number of years,” says Gilmore. “About six or eight years ago, there was a small group of stakeholders that represented health systems, providers, EHR vendors, and others that came together and formed this partnership.”
Why now?
The CARES (Coronavirus Aid, Relief, and Economic Security) Act required the HHS Office for Civil Rights (OCR) and the Substance Abuse and Mental Health Services Administration (SAMHSA) to align components of Part 2, HIPAA, and the Health Information Technology for Economic and Clinical Health Act (HITECH).
“The question was, How could we align Part 2 with HIPAA so that the appropriate use and sharing of SUD treatment and prevention records can be a part of the comprehensive treatment plan,” notes Gilmore.
The original regulations, designed to protect patients from stigma and discrimination, have inadvertently increased both, making it harder for patients to access treatment and providers and health plans to deliver it.
CARES recognized that Part 2 had not kept pace with other privacy updates and that multi-consent requirements were a challenge for not only patients but also providers, health plans, and other stakeholders. HHS and SAMSHA issued proposed Part 2 rule updates in December 2022 and finalized them in February 2024.
“This is a step toward modernizing privacy regulations for persons with substance use disorders and ensuring patients receive improved, coordinated whole-person care,” said Gilmore in The Partnership press release.
Speaking with HealthLeaders, she added: “SUD got left behind. Part 2 protected maybe too much for effective information sharing and the best treatment and collaboration.”
The Part 2 regulations add data breach protections.
The final regulations also strengthen privacy protections in the form of notification, enforcement, and penalties for data breach and inappropriate use. HHS has published a summary of rule updates in a new Fact Sheet.
They leave other things on the table.
CARES also required regulatory updates on SUD anti-discrimination. HHS and SAMHSA will issue these separately, with more patient protection rules also coming.
Separately, there is state law.
“We're working with partners and others as they try to really digest, understand, and implement with state law in mind,” says Gilmore, adding: “They are going to perhaps be more stringent. And what will that mean for providers and plans that work in different states?”
The update affects all healthcare stakeholders, with challenges and opportunities.
Gilmore notes that the Part 2 update will allow for an “easier flow of information on the use, disclosure, and redisclosure” of TPO when stakeholders receive SUD consent.
“There will need to be work on how you operationalize that. How do you conduct training and promote understanding? Are there updated policies and procedures that need to ensure you’re now aligning with Part 2? There is also the option for patients to revoke their consent and what that would mean going forward.”
“These are some of the opportunities and challenges for plans, providers, and others,” the executive adds.
Gilmore adds: “There may still be some challenges around data segmentation. While the final rule explicitly states that data segmentation in the medical record is not required, there may be a time when you need to have that, especially when someone later limits or revokes consent.”
What roles did the ABHW and The Partnership play in updating 42 CFR Part II?
The ABHW represents health payers who provide — and work to advance — high-quality mental health and SUD access, benefits, and care.
ABHW is the chair of The Partnership to Amend 42 CFR Part 2. The Partnership is a coalition of 50 provider, payer, pharmacy, and other healthcare organizations. Payer-specific organizations include the Alliance of Community Health Plans, AHIP, ABHW, Association for Community Affiliated Plans, Blue Cross Blue Shield Association, and Medicaid Health Plans of America.
What’s next?
ABHW and Partnership members plan to continue collaborating during stakeholder implementation on Part 2 education and training opportunities, state-specific legislation, and other issues.
And that’s just the beginning.
“There is a lot of other activity in the privacy area of healthcare,” says Gilmore. “We’ll be watching how information blocking [in the medical record] and other regulations that apply to privacy interconnect with Part 2 and what will happen moving forward.”
The Digital Therapeutics Alliance is helping outline integrated digital product workflows that identify gaps for payers, clinicians, and patients.
Digital therapeutics (DTx) have a long way to go to become standardized treatment. Even after a DTx manufacturer demonstrates product cost-benefit, there are the larger pain points: how to pay for and integrate therapies delivered via hardware and software innovation into the U.S. healthcare delivery system.
But progress is happening — from defining more specifically what the pain points are to how they differ based on the payer. A new DTx Integration & Workflow Report this month from the Digital Therapeutics Alliance (DTA) provides more answers as one company — RelieVRx — makes strides in coverage classifications, pathways, and reimbursement.
A new category of medicine
As DTA notes about digital therapeutics: “As a new category of medicine, one of the first barriers is the challenge of integration into the traditional healthcare system so patients can receive access in a way that is convenient and consistent for them.” The organization’s March 2024 report adds that reimbursement “has significant influence on the workflows of the full ecosystem.”
Reimbursement varies based on whether a payer classifies a digital therapy as a pharmacy benefit, medical benefit, or wellness category — a classification that often varies over time and by payer.
Pharmacy and Medical Benefit Workflows both begin with negotiations between the DTx manufacturer and the payer and PBM, who make decisions about:
overall coverage based on the therapy’s cost versus its benefit to the health plan;
formulary placement, including tier and Preferred Drug List (PDL) status;
utilization management, such as prior authorization or step therapy requirements;
product pricing; and
contract details.
The workflow that gets a DTx from coverage determination to patient treatment is much simpler if the payer covers the treatment as a Medical versus a Pharmacy benefit.
Following formulary integration, health plan member communication, and vendor integration, a provider can prescribe the DTx — if required — and either a pharmacy or the manufacturer fulfills the prescription. Continued coverage and formulary decisions are based on ongoing cost-benefit analysis.
Three reasons why DTx pathways are important
These pathways — Medical versus Pharmacy, prescription versus non-prescription — are important for multiple reasons.
First, the U.S. healthcare system must be able to pivot for innovation. The right care in the right place at the right time is shifting — from remote facilities to the home and from traditional treatments and prescription drugs to software and wearables.
Second, every DTx company faces the same challenge: the best way to take their product to market, direct-to-consumer (DTC) or direct to payer. Big Health was one of the first companies to realize that the customer is the payer. It has partnered with national PBMs covering 150 million+ lives to expand access and scale faster. Because it has taken other companies longer to learn these lessons, the DTA has also published a playbook.
Third, things are looking up for reimbursement. One year ago this month, another company — AppliedVR — was the first to:
have an immersive virtual reality (VR) product approved under an existing Medicare benefit category; and
be approved with an entirely new reimbursement code.
The result? AppliedVR is the first company to create an immersive therapeutic now covered by Medicare.
CMS clears the way for virtual reality DTx reimbursement
In 2022, CMS approved RelieVRx, a treatment for chronic lower back pain, as a Durable Medical Equipment (DME) and under new HCPCS Level II code: E1905 - “Virtual reality cognitive behavioral therapy device (CBT), including pre-programmed therapy software.”
HCPCS stands for Healthcare Common procedure Coding System, “a collection of standardized codes that represent medical procedures, supplies, products and services” that allow Medicare and other insurers reimburse health insurance claims (NLM). A Level II code applies to products, supplies, and services including those that involve DME.
CMS approved RelieVRx as a DME with its own code because:
The product met all five CMS DME requirements related to use, effectiveness, and purpose.
It had already been FDA authorized as “Software in a Medical Device” versus “Software as a Medical Device” (emphasis added).
CMS noted that — with RelieVRx— “the medical software and the device on which it is housed are so integral to each other that we consider them to be one whole device, not software and a separate device.”
RelieVRx had received “FDA breakthrough status for the first de novo FDA-authorized immersive virtual reality (VR) medical device for home-based treatment” of chronic low back pain.
FDA breakthrough devices and de novo pathways allow innovative medical devices that are more effective than existing options to receive expedited review and approval for faster patient access.
The FDA and CMS approvals pave the way for Medicare reimbursement and make it more likely that other payers (commercial, Medicaid) will follow suit.
DTx pain points and open questions
While AppliedVR awaits specific Medicare payment and MAC fee schedule decisions, it has expanded its RelieVRx contract with the Veterans Health Administration, part of the Department of Veterans Affairs (VA).
The VA partnership is helping AppliedVR work through multiple coverage, reimbursement, and clinical workflow pain points. For RelieVRx, these include the pain points associated with DTx as a Medical Benefit that requires a prescription:
Coverage is lacking and/or inconsistent. This remains true for DTx across all payers. Medicare now covers AppliedVR’s RelieVRx, but the product will need commercial, Medicaid, and employer reimbursement to grow and scale.
Provider scope of practice is unclear. This includes who can prescribe, fulfill, and monitor the treatment. AppliedVR’s government contract allows VA physicians to prescribe AppliedVR.
Delivery is not standardized. How DTx is delivered and by whom (pharmacy, specialty pharmacy, manufacturer). RelieVRx can be administered in VA facilities or in veterans’ homes.
In past interviews, AppliedVR founder and CEO Matthew Stoudt has noted that the VA partnership will help establish national guidelines for home-based prescription because RelieVRx is now on the VA formulary (the VA Federal Supply Schedule, or FSS).
These pain points must now be answered for other payers.
The Digital Therapeutics alliance plans to advance this work through future research, Task Groups, and DTx Integration & Workflow Reports “to make healthcare more accessible and of higher quality for patients and their families . . . [and to address issues] that prevent a positive experience for patients, payors, and providers.”
The payer’s partnership with Carallel addresses multiple industry pressures.
Too many epidemics are invisible or forgotten.
The pandemic reminded us of healthcare disparities that had existed for decades. The U.S. Surgeon General sounded the alarm on something Americans were already feeling: lonely. And now: the critical role that family caregivers play in a healthcare system that hasn’t really helped them.
To address the latter, Independence Blue Cross and Carallel have expanded a partnership that supports the caregivers of Independence Medicare Advantage members. The program gives loved ones access to expert advice, practical assistance, planning resources, support groups, and connections with Carallel's Care Advocates.
HealthLeaders spoke with Dr. Heidi Syropoulos, Medical Director of Government Markets with Independence, and Shara Cohen, CEO of Carallel, who described:
how their program launched with hospital discharges and how it expanded;
how a multi-week, high-touch program design earned a 90+ Net Promotor Score (NPS); and
how program satisfaction intersects with payment incentives to expand payer caregiver investment.
“Caring for a loved one can be very rewarding, but it also takes a huge, huge toll on the person who's providing the care,” says Syropoulos. At Independence, we really wanted to ease that burden, even just a little bit, by offering extra help and helping connect caregivers to the right resources.”
Cohen adds: “The fact that healthcare organizations have had limited involvement with caregivers is a real gap. Independence has asked very proactively, ‘How do you fill that gap? How do you create that connection and create a relationship with a key person in the whole-person circle of care?’”
Today’s caregivers face significant challenges
Cohen notes that 80% of home care is provided by a family caregiver. That care runs the gamut from paying bills from 2,000 miles away to helping a loved one get dressed on a daily basis.
The Carallel CEO and Independence executive paint a stark picture of caregiving today.
“Caregivers do every job from the janitor to the CEO and everything in between. But they are often hidden and left out of the healthcare system,” says Cohen.
Syropoulos adds: “Being a caregiver is like being diagnosed with a disease — you’ve been given a job that you didn't want, that you didn't even know existed, that you didn't apply for, that you often are not qualified for, and that you can't quit.”
“Also, you’re not going to be paid. This is essentially what chronic disease management is in the 21st century. There's just not enough money to go around. There should be. At Independence, we really wanted to ease that burden, even just a little bit, by offering extra help and helping connect caregivers to the right resources.”
Insight #1: The most dissatisfied health plan members
How did Independence and Carallel decide which members to target first?
“The members who rated the plan worst all have one thing in common: they had all been admitted to the hospital or a nursing home recently,” says the Independence exec.
This insight led Independence and Carallel to create the Post-Acute Care Initiative, which has now expanded.
“Going into the hospital is just a painful, complicated thing to do,” says Syropoulos. “That transition of care between leaving a facility and coming back is significant. So we thought, ‘Here’s a place where we need to do something better.”
Cohen adds: “If you think about that moment in time when somebody is discharged, it's not that they're healthy. It's just that they're not sick enough to stay in the hospital.”
“Hospitalizations are a high friction point for family members trying to interact with health plans . . . That was one of the first program measures.”
It was exciting, Cohen adds, that the Independence team recognized these collective factors and wanted to create caregiver relationships that would impact both CAHPS and cost outcomes.
The Post-Acute Care Initiative and the Age-Friendly Model
Introduced in January 2023, the Independence-Carallel program features:
Early contact: Independence Case Managers (CMs) contact all members admitted to a hospital or nursing home as soon as possible after admission. CMs identify if there is a caregiver and explain the program benefits.
Early enrollment: Carallel enrolls interested caregivers post-discharge and designs structured touchpoints between caregivers and care advocates, including 24/7 resources that support caregiver resilience.
A manageable, well-executed plan: Caregiver assistance includes help with complex tasks like advanced-care planning, finding and vetting at-home or residential support.
Case manager collaboration: Independence CMs stay involved to help ensure the member’s experience is a good one.
The program incorporates the Age-Friendly Health Systems model, which supports adults and their family caregivers with “four evidence-based elements of high-quality care, known as the ‘4Ms’: What Matters, Medication, Mentation, and Mobility.”
When Syropoulos learned of the health system model, she thought: “Hmm, why aren’t Medicare Advantage companies Age Friendly? We should be.” She and her Government Markets team pursued a health plan recognition program but shifted their focus to implementing 4M principles to improve the care for older Independence members.
Program results: Satisfaction, expansion, and cost targets
“We feel strongly that caregiver support helps improve health outcomes for the members that they care for — that members feel heard and satisfied,” notes Syropoulos.
That would appear to be true. The Post-Acute-Care Initiative has a Net Promotor Score (NPS) of 90+. The NPS measures customer loyalty and satisfaction with a single question: "On a scale of 0 to 10, how likely are you to recommend our product/service to a friend or colleague?" An NPS above 70 is rare.
“90 plus shows that caregivers are overwhelmingly satisfied with the program.”
The Post-Acute-Care Initiative was designed to include eight weeks of touchpoints but around 50% of caregivers request support beyond that period with 12 program/caregiver interactions on average.
“We had full recognition that we would go at the caregiver’s pace,” says Cohen. “We were going to design the program with flexibility to their preferences.”
The post-acute program expanded in January 2024 to include the Dementia/Alzheimer’s Carallel Plus Program and additional support for all members in case management.
“The more we can help caregivers navigate benefits, access to services, and avenues to be more involved, I think we’ll see results in the cost, experience and quality of care,” the Carallel CEO adds.
“CAHPS is your friend”
Why focus on caregiver support now? Medicare reimbursement cuts and annual CMS Medicare Advantage program regulations.
“I can tell you one overarching reason: the Medicare Advantage plans in this space,” says Syropoulos. “That has completely to do with the CMS Star Ratings program. Stars is about quality and customer satisfaction. There are a lot of clinical outcome measures, but CAHPS is completely about customer service.”
CAHPS is the Consumer Assessment of Healthcare Providers and Systems and includes questions about member satisfaction with their health plan and providers.
“Those questions in CAHPS are highly weighted in the Star Ratings so you have to do well in that survey,” says Syropoulos, stressing its importance.
“CAHPS is your friend. You need to really pay attention to member pain points. We're all consumers of healthcare and can list tons of pain points. So now think about a frail, elderly, 85-year-old who lives alone.”
“If you do well with Stars and you’re a four-star plan or above, you get a significant bonus. That is part of the P&L of that division of the company. So, it does come down to finances. That's just a reality.”
Cohen adds: “We didn’t get into this just to cut costs. We got into it because we think this is really going to help members and create satisfaction with the plan. Decreasing cost of care is an added bonus.”
“It's not that people haven't wanted to do this. You just have to figure out how to pay for it.”
