Third Party to Assess Value of Digital Health Technology

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As the US value assessment landscape evolves, a new third-party framework may standardize requirements and open reimbursement pathways for digital health.

On July 18, 2023, the Peterson Center on Healthcare issued a press release announcing the launch of the Peterson Health Technology Institute (PHTI)—with a $50 million funding commitment. The PHTI is a non-profit that intends to conduct evidence-based assessments of digital health solutions, including their clinical benefits, economic impact, and effects on health equity, privacy, and security.

A quote from Michael Peterson: "It’s clear that digital tools and artificial intelligence can provide a range of benefits to patients, but we have an inadequate understanding of what works and how much it should cost. By producing independent, evidence-based research on emerging technologies, the Peterson Health Technology Institute will help improve and accelerate healthcare innovation in the United States.”

To develop digital health technology (DHT) assessments, PHTI has partnered with the Institute for Clinical and Economic Review (ICER). ICER was founded in 2006 and has been evaluating drugs, devices, and diagnostics as part of its Emerging Therapy Assessment and Pricing Program since 2015. Partnered with ICER, PHTI is focused on DHTs. The initial ICER-PHTI Assessment Framework for Digital Health Technologies was released in September 2023.

Assessing the Value and Paving Reimbursement Pathways for DHTs

Similar to ICER’s value assessments, PHTI’s reviews will analyze data and evidence about the clinical performance of DHTs to help determine the associated clinical benefit in alignment with their economic value. As Avalere previously reported, stakeholders expect digital therapeutics to increase the value of medicinal assets, drive differentiation, and improve patient outcomes. DHT manufacturers may be able to use value assessments when engaging with the Centers for Medicare & Medicaid Services (CMS) and other payers regarding coverage and reimbursement pathways for their products. In June 2023, for example, CMS proposed a procedural notice outlining a new Medicare coverage pathway called Transitional Coverage for Emerging Technologies, which “encourages evidence development if evidence gaps exist.” As DHT solutions open new clinical care delivery and management approaches (e.g., remote physiological monitoring), real-world data generated by DHTs may enable payers to explore value-based or alternative payment models that often rely on extensive evidence requirements.

Assessing the Value and Paving Reimbursement Pathways for AI and ML in DHT Solutions

The initial ICER–PHTI DHT value framework addresses how “the use of artificial intelligence (AI) and machine learning (ML) in DHT software presents a unique assessment challenge” that relates to the validation of outcomes outside the trained data set and implications for understanding predictive accuracy as a third party. Future versions of the framework “will more specifically address how to assess unique aspects of AI within DHTs.”

Researchers are also evaluating who will pay for AI. The researchers are optimistic about the potential for AI solutions alongside value-based payment, noting, “as payment systems evolve toward more mature value-based payment models where measuring improvement in quality becomes increasingly important at decreased costs, AI becomes a valuable tool for health care systems.”

Avalere’s Outlook

There is no “right” approach to conducting value assessments for DHTs, but an effective approach should account for multiple measures of value. The more measures assessed, the more evidence is generated to support valid and reliable inferences about the value of DHTs. Avalere is available to help DHT and AI developers demonstrate the value of their products through effective evidence generation, navigate third-party value assessment preparation and response, and explore pathways to coverage, reimbursement, and broader access. To learn how Avalere can help, connect with us.

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