Digital Health in few pictures

 

1. What is the difference between digital health, digital medicine and digital therapeutics?

source - DiMe

Let's double zoom in on this extremely simplified view 

source - DiME

2. What are some examples of digital health, digital medicine and digital therapeutics?

source

3. What value the DTx can create?

source - DiMe

4. Are there any FDA-approved DTx?

Following DTx have been authorized by the FDA and require a doctor’s prescription. These DTx products have come to be known as Prescription Digital Therapeutics (PDTs).

source: RxBenefit

5. So this is about fancy video games?

Umm a little bit more than that.  

6. What are the commercial models followed by digital health companies? In simple terms how they get paid?

source - DiMe

Road to commercialization in US by Joe Connolly

Lots of buzz about new CPT codes for prescription digital therapeutics (Rx DTx), but will they result in market traction and revenue? 

The short answer: not yet.

Current Procedural Terminology (CPT) is a medical code set that is used to report medical, surgical, and diagnostic procedures and services to entities such as physicians, health insurance companies and accreditation organizations.

New CPT codes are only one step towards achieving "reimbursement" for new therapies. While it's a start, we'll also need *payment* and *coverage* to make the Rx DTx business model viable.

Next steps to look for:

**Payment**
This a process by which a $ amount is assigned to codes. This is usually handled by the AMA's RUC, which assigns relative value units (RVU) to determine Medicare reimbursement rates. Many insurers base payment rates off these Medicare benchmarks.

The problem is that this new code is a Category II code, not a Category I code. Category II codes are for tracking, not for payment, so they typically have a $0.00 payment rate.

That means DTx companies will still have to negotiate plan-by-plan rates and set up custom claims adjudication. That's a big lift for plans.

**Coverage**
This step involves getting insurers saying which indication(s) (i.e. patient characteristics) they'll allow to pay out the payment amount.

As Exits & Outcomes has written about extensively, no one is really covering Rx DTx for any indication.

In summary, this code is only the start for Rx DTx to get true "reimbursement." There's still many hurdles on the payment and coverage side to iron out, and market access will remain a thorn for the Rx DTx business model.