Can Accreditation Promote Digital Therapeutic Uptake and Reimbursement?

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 21^st 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.

Four payer organizations so far have signed on to help establish the DTx accreditation criteria: Chorus Community Health Plans, Mass General Brigham Health Plan, Oscar Health, and the Cooperative Benefits Group.