Virtual Addiction Treatment Providers Go Brick-and-Mortar with DEA Changes Looming

The proposed telehealth-prescribing rules from the Drug Enforcement Administration (DEA) could require digital addiction providers to fundamentally change their business model and limit patient access to virtual addiction treatment. 

These new rules will likely hit patients with the least access to status quo treatment models the hardest, especially for access to medication-assisted treatment (MAT).

“Roughly 75% of our patient population would be impacted, and therefore at risk [of being barred from care] given the changes that would be necessary to stay in compliance,” Sam Arsenault Wilson, chief quality officer and co-founder at Confidant Health, told Behavioral Health Business.

In February, the DEA announced a pair of proposed rules that would effectively end telehealth prescribing of many controlled substances without an in-person examination. Those rules have faced voluminous and severe backlash during the rules’ public comment period.

The real-world impacts

Confidant Health provides virtual addiction treatment and mental health services in Connecticut, Virginia, Texas, Florida and New Hampshire. If passed, the new rule would force the Bethel, Connecticut-based startup to stop taking self-referrals, the majority of its new and potential customers, in order to comply with the DEA’s proposed in-person examination for treating patients with controlled substances beyond a 30-day supply. 

To comply with the proposed rule, Confidant Health must open offices or become dependent on partnerships with other providers. The rules would also likely cut off Confidant Health’s rural patients. In addition to all of that, the change in operations would result in a limit to the scope of the people the company serves. 

The potential impacts of the proposed DEA rules have already had significant real-world effects on virtual addiction treatment and other telehealth-focused care offerings.

Workit Health announced plans in April to reduce its workforce by 100 employees “to remain a sustainable and strong company amidst market shifts and regulatory changes,” according to previous BHB reporting.

Similarly, Bicycle Health Chief Medical Officer Dr. Brian Clear said his company expects to attract 20% fewer patients and lose 5% of existing patients.

Bicycle is a Boston-based virtual addiction treatment provider. While the company sees patients in 32 states, 10 states make up a majority of Bicycle’s patient base. And within those states, most patients live outside metros with the greatest concentration of providers. 

Courtesy of Workit Health

“If we find that patients outside of large metro areas are consistently struggling to get referrals within 30 days, we’d have to consider pulling out of those rural areas,” Ankit Gupta, CEO and founder of Bicycle Health, said in an email.

The company may have to pull back on marketing and enrollment efforts in any area where 30-day referrals are difficult.

Bicycle Health maintains offices in each of its states and has committed to expanding partnerships with other providers to ensure compliance with in-person exam requirements to ensure patients in care and seeking care can get and keep it.

“We’ve resisted raising our cash-pay rates – in spite of inflation – because we wanted to keep treatment affordable, but we’d have to revisit that decision if the rules are unchanged,” Gupta said.

Boulder Care similarly sees significant limits on its growth and impacts on its most vulnerable patients. Between 8% and 9% of the company’s patients are rural, don’t have a primary care provider and don’t have stable transportation, according to survey data from the company. 

“This is where we’ll spend the bulk of our time problem-solving with patients,” Boulder Care CEO Stephanie Strong told BHB. “Most patients reported a challenge on at least one or two of those three dimensions.”

Regardless of transportation or close access to facilities, as many as 60% of Boulder Care’s patients don’t have a primary care provider, forcing many to find one and establish a patient relationship and examination with them to potentially get a referral back to Boulder Care’s treatment.

On average, the wait time to see a provider can be as long as 26 days on average, according to data from AMN Healthcare and Merritt Hawkins.

Boulder Care has purposefully limited the company’s growth during the federal public health emergency (PHE) to ensure it can continue to provide care past the end of the regulatory flexibilities provided by the PHE. The PHE ends May 11.

Luckily for Boulder Care, more than a quarter of its patients are referred in from community partners.

“So this care coordination process is not new for us,” Strong said. “This is also how we practiced prior to the COVID-19 PHE.”

Impact on Medicaid patients

However, the end of the public health emergency marks another turn of disruption for Boulder Care and other patients with the resumption of Medicaid redeterminations.

During the PHE, states were able to get added Medicaid funds if they paused the process of reassessing members’ eligibility to be on the public safety-net health plan. That process will also begin soon, disrupting care for millions since national enrollment levels in Medicaid balloon during the pandemic. 

About 90% of Boulder Care’s patients are on Medicaid.

“Boulder patients have long-term retention rates of 60% to 90% at 12 months, validated by external third-party analyses,” Strong said. “We anticipate this rule, as written — compounded by disruptive nationwide Medicaid redetermination — will hinder our success in retaining patients for  [more than] 180 days.”

Zack Gray, CEO of virtual opioid-used disorder (OUD) treatment provider Ophelia Health, told BHB that those on Medicaid generally will likely struggle the most to get in-person exams — pointing to many Medicaid patients not having a primary care provider in the first place, longer wait times for Medicaid patients and local provider shortages.

Most of Ophelia Health’s patients are on Medicaid and live in rural areas or  “treatment deserts.” 

The proposed rules will also elevate costs, driving a shift from vulnerable Medicaid patients, whose plans don’t reimburse well, to those that may be less vulnerable and on better-paying commercial health insurance plans. The rules will make it harder and more costly to care for Medicaid patients, with costs that need to be made up elsewhere, Gray said.

“The impact here will be to narrow the population who can access Ophelia by cutting outpatients who need us most,” Gray said. “For Ophelia, the main impact is likely to be a shift in patient mix, as Medicaid patients are replaced by commercial patients.”

Behavioral Health Business

When virtual addiction treatment starts with brick-and-mortar partners

Companies built around partnerships with other physical care providers, such as hospital systems, private physician practices and public health clinics, will feel less impact. For those companies, the pandemic made it much harder to grow, the opposite of the many direct-to-consumer providers that flourished during the pandemic, PursueCare CEO Nick Mercadante told BHB.

PursueCare, a Middletown, Connecticut-based hybrid addiction treatment provider, struggled to get potential hospital and clinic partners on the phone during the pandemic. Despite the sales challenges, the company has a bulwark against the challenges the proposed DEA regulations present; its health care partners refer patients to its providers, potentially satisfying the proposed rule’s in-person exam rules.

The company was founded and launched at the end of 2019, designed to operate within the strictures of the Ryan Haight Act, the federal law that impacts most telehealth prescribing. 

Still, as many as 20% of PursueCare’s patients could be impacted by the proposed rule if it comes into effect as presented. These patients are self-referrals.

Like the other companies, PursueCare is most worried about access for rural patients.

PursueCare operates six clinics. Most patients received virtual addiction treatment services. It operates in 13 states, with about two-thirds of its patients residing in the Ohio River Valley states of Kentucky, West Virginia, Ohio and Pennsylvania.

The company already provides case management to ensure coordination with provider partners. Mercadante posits that the proposed rule’s main impact would require PursueCare to add another layer of administration and compliance work to ensure it meets its requirements.

“For the other patients that don’t come from care settings, … we have more of a burden to make sure that the patient gets into the case manage the patient into primary care or some other form of in-person treatment,” Mercadante said. “To do that in 30 days is a tall order. As I think everybody knows, it takes a long time to get in-person care anywhere, never mind in areas that experience pretty pervasive provider shortages and scarcity of care.”