Behavioral Digital Health Transformation | Shepherd Moline Richter & Hampton LLP

This weblog is the second installment of Digital Well being Traits Sequence.


Digital well being companies have proliferated because the onset of the COVID-19 pandemic, and behavioral well being companies have seen important will increase of their use. Earlier than the pandemic, telehealth visits for a psychological well being or substance use dysfunction accounted for lower than 1% of outpatient visits, however by mid-2020, almost 40% of telehealth outpatient visits had been for psychological well being or substance abuse. medicine.[i] Behavioral well being is the highest-funded scientific indicator in digital well being, and digital behavioral well being corporations raised $1.7 billion within the first three quarters of 2022.[ii] Investments in behavioral digital well being companies have the potential to rework the healthcare system in a number of key areas.

Materials use therapy

Throughout the COVID-19 public well being emergency (“PHE”), the Drug Enforcement Company (“DEA”) has typically waived the requirement that suppliers conduct an in-person go to with sufferers in a registered facility to prescribe sure managed substances. Startups are beginning to provide digital well being companies to deal with substance abuse, for instance, by way of:

  • prescription digital therapies (software-based therapies delivered on cell gadgets); And
  • Present same-day entry to drug-assisted therapies akin to buprenorphine and naloxone.

Digital psychological well being companies for adolescents

Many corporations are beginning to goal digital psychological well being companies to teenagers, making care much less stigmatizing and extra handy for teenagers to entry. Enterprise capital funding for digital psychological well being companies for youngsters and adolescents is near $1 billion in 2021, greater than doubling from 2020.[iii] Within the 2021-2022 college 12 months, almost one in 5 faculties supplied psychological well being companies by way of telehealth, with telehealth getting used mostly in rural areas, thus increasing entry to psychological well being look after weak college students particularly in gentle of worsening well being difficulties. Psychology Gun Violence and the COVID-19 Pandemic.[iv] Some examples embrace:

  • digital intensive outpatient applications designed only for teenagers and younger adults; And
  • Purposes that present therapy companies and are built-in into college interventions.

Psychedelics and digital well being

Firms are investing in delivering psychedelic remedy by way of digital well being to deal with psychological well being problems, akin to:

  • telehealth platforms for ketamine and psilocybin remedy; And
  • Digital well being information designed for ketamine therapies.

In November 2020, Oregon turned the primary state to legalize psilocybin-assisted remedy and commenced accepting licensing purposes on January 2, 2023.[v] In November 2022, Colorado voted to decriminalize psilocybin mushrooms. The narcotics market in healthcare is predicted to proceed increasing in 2023 and the market worth of corporations working on this area is predicted to exceed $8 billion by 2028.[vi]

trade issues

Firms lively within the rising and increasing behavioral well being area face a fancy regulatory atmosphere. The panorama of reimbursement has modified because the begin of the pandemic. Medicare has expanded reimbursement for psychological well being and substance use dysfunction companies by permitting sufferers to obtain sure companies at dwelling, a few of which have been completely added to the listing of companies digital well being can present, and by permitting audio-only visits to psychological well being and substance use companies in sure circumstances .[vii] With the onslaught of private and non-private corporations offering digital behavioral well being companies, there are knowledge and privateness issues particularly with customers questioning who owns the information from these digital visits.

In December 2022, the US Division of Well being and Human Companies (“HHS”) introduced proposed adjustments to 42 CFR Half 2, which governs medical information for federal adjuvant therapy applications. With the arrival of digital psychological well being companies and associated operational points, regulatory modernization has additionally begun to happen.

Firms that use digital well being to prescribe managed substances might want to intently monitor the expiration of digital well being waivers and the DEA’s actions towards their private necessities. Though the PHE has not but expired, the Division of Justice (“DOJ”) has lately elevated its enforcement exercise within the area of telehealth, significantly with regard to behavioral well being prescribing strategies and habits. Whereas CY 2023 Consolidated Appropriations Act The waiver didn’t lengthen the Ryan Top Act requirement for a subjective take a look at to prescribe managed substances, there have been talks in Congress to increase that flexibility.[viii] The Division of Justice relied on public sources to search out details about these prescribing habits, and corporations that prescribe behavioral well being therapies ought to proceed with warning and consider their supplies supposed for the general public.[ix]


[i] “Telehealth has performed an enormous position in assembly psychological well being wants throughout the COVID-19 pandemic,” Kaiser Household Basis (March 15, 2022).

[ii] “Digital Funding for Psychological Well being Grows to $700 Million in Q3,” Behavioral Well being Enterprise (October 25, 2022).

[iii] “Digital Kids’s Psychological Well being Startups Catch The Money, New Knowledge Emerges. It Gained’t Be Sufficient To Repair The Disaster,” Morning Seek the advice of (March 31, 2022).

[iv] “The Panorama of Psychological Well being Companies in College,” The Kaiser Household Basis (September 6, 2022).

[v] “Oregon Psilocybin Companies Overview,” Oregon Well being Authority (Accessed January 31, 2023).

[vi] “Pharmaceutical Market Value $8.31 Billion by 2028 – Unique Report from InsightAce Analytic,” Yahoo! Finance (July 18, 2022).

[vii] “Calendar Yr (CY) 2022 Closing Base for Medicare Doctor Payment Schedule,” Facilities for Medicare and Medicaid Companies (November 2, 2021).

[viii] For extra info relating to CY 2023 Consolidated Appropriations Act, please see the next useful resource: Important Well being Care Provisions of the Consolidated Appropriations Act of 2023 | Well being Care Regulation Weblog (

[ix] For extra info relating to enforcement of telehealth, please see the next useful resource: Latest developments in telehealth enforcement | Well being Care Regulation Weblog (

Leave a Comment