MDMA-assisted therapy could soon be approved by the FDA. Will insurance cover it?

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There’s been a lot of hype around psychedelics lately, and justifiably so.

MDMA- and psilocybin-assisted therapies have grabbed headlines for their potential to heal treatment-resistant post-traumatic stress disorder (PTSD) and depression, respectively. And in early September, California lawmakers narrowly approved a bill to decriminalize the possession and personal use of a limited list of natural psychedelics, including psilocybin, the active ingredient in “magic mushrooms.” Veterans groups say that such a law would help destigmatize psychedelics that in some cases have been more effective in treating certain mental health conditions than traditional drugs and therapies.

But what’s often left out of news coverage is how accessible psychedelic therapy will be for people who don’t have the hundreds or thousands of dollars it’ll likely cost to access these treatments without insurance.

One reader asked about this important practicality: “Psychedelic-assisted therapy is exciting, especially as it might be approved by FDA as early as 2024 (in the case of MDMA-assisted therapy for PTSD), but will my insurance cover it?”

If you haven’t read Group Therapy’s series on psilocybin, MDMA and ketamine therapies, those stories will catch you up on the nuances of these promising treatments. This newsletter will mainly address MDMA therapy, as it could be approved by the FDA in the next few months (a prescription version of ketamine called Spravato, given through a nasal spray, was approved in 2019 by the FDA for treatment-resistant depression).

We’ll look at how likely it is that MDMA therapy will be covered by insurance, how accessible this therapy may be for people without insurance or those on government-subsidized plans, and potential incentives for insurance companies to cover the treatment.

To answer these questions, I spoke with Anton L.V. Avanceña, a health policy researcher at the University of Texas at Austin who studies how efficiency and equity in health can be improved.

Will MDMA therapy be covered by insurance?

Though MDMA therapy is expected to be approved as a treatment for PTSD soon, it’s hard to know at this point how costly treatments will be. But advocates fear that the ecstatic publicity around the treatment’s promise will inflate prices.

“To do psychedelic therapy, you need a special environment, a psychiatrist, two psychedelic facilitators — a whole staff monitoring this process. What will that look like in clinical care? How do you scale it up in an affordable, sustainable way?” Jennifer Mitchell, director of UC San Francisco’s Institute for Translational Neuroscience and lead author of the phase III MDMA trial published in 2021, told me last year.

Under our current (and arguably very broken) healthcare system in the U.S., the most feasible way to make MDMA therapy more accessible is through insurance, experts said. But a several key things will need to happen before that’s possible.

First, the mainstream medical establishment will need to see MDMA therapy as legitimate. The treatment is well on its way; In 2021, results from a Phase 3 trial published in 2021 were encouraging. In follow-ups two months after their final MDMA-assisted therapy session, two-thirds of the study’s 90 participants no longer met the diagnostic criteria for PTSD. Another 21% of participants saw a meaningful reduction their symptoms.

The treatment could win FDA approval by 2024. Before deciding to reimburse for the therapy, though, insurance companies will wait to see whether hugely influential organizations like the American Psychological Association and the American Psychiatric Association endorse it as an effective treatment for severe PTSD, Avanceña said.

Another step toward legitimacy is that the American Medical Association (AMA) recently approved insurance billing codes for psychedelic therapy. CPT codes are numbers assigned to procedures, diagnoses and services healthcare providers give to patients. The recently approved codes are a temporary set intended to help track the use of emerging treatments and procedures.

It’s a promising development, but codes do not equal coverage, Avanceña noted.

What would motivate insurance companies to cover psychedelic therapy?

At the end of the day, private insurance companies won’t cover MDMA therapy unless it makes financial sense for them to do so.

And it probably will make sense for these companies if further research shows that MDMA is in fact an effective treatment for severe PTSD, Avanceña said. That’s because insurance providers are motivated to improve the health of their risk pools; that way, they save money and increase profits.

Right now, the standard ways of treating PTSD — including cognitive behavioral therapy (CBT) and antidepressants — don’t work for an estimated one-third of people living with this condition, according to the National Institutes of Health. Some research indicates that CBT is ineffective for a whopping 50% of PTSD patients.

And there can be many other costs associated with untreated or treatment-resistant PTSD that insurance companies absorb, because PTSD comes with an increased risk for substance use disorders, chronic pain, suicidality and many other medical problems.

“Giving these patients access to an effective intervention [like MDMA therapy] could lead to savings down the road for insurance companies, even though it costs them a lot upfront,” Avanceña explained.

Government-subsidized insurance like Medicaid, known as Medi-Cal here in the Golden State, is a different story.

“These treatments are really expensive, and Medicaid programs compared to other types of insurances face serious budget constraints,” Avanceña said. “Even if the government wants to increase access to these treatments, it’s unclear whether they could afford to pay for them. They would probably have to take resources away from other programs and services, which we don’t necessarily want them to do.”

Because Medicaid is the country’s public health insurance program for those with the least resources, this is a major problem. Research has shown that low-inome adults are not only more likely to be exposed to trauma, but also much more likely to be diagnosed with PTSD after a traumatic event. A study of 9/11 survivors several years after the attacks showed that people making less than $25,000 annually were eight times more likely to have PTSD than those earning $100,000.

Given this reality, I asked Avanceña about the chances that MDMA therapy could become accessible to people of all socioeconomic backgrounds.

“It’s a big question in the field,” he said. “And personally, I think my impression is no, and that it’s really going to be a treatment for the rich if it doesn’t get covered by insurance programs with a low financial burden on patients.”

I asked the MAPS Public Benefit Corporation — the corporate subsidiary of MAPS — the same question, and they were (unsurprisingly) more optimistic. MAPS (Multidisciplinary Assn. for Psychedelic Studies) is the nonprofit that’s led the effort to legalize MDMA as a psychiatric treatment.

“If MDMA-assisted therapy is approved by the FDA, MAPS PBC will work to create avenues for people of all socioeconomic backgrounds have access,” they said in an email statement.” We believe this can potentially be accomplished by how we introduce the treatment if it is approved into the healthcare system and how payors choose to cover the approved treatment. If approved by the FDA, we will support training a diverse group of therapists in the new modality and supporting education in a range of geographic locations to help increase access.”

. . . .

I wish I could deliver a more satisfying answer — that anyone living with chronic PTSD might one day have access to this path of healing. But it seems that if this potentially life-saving treatment is ever going to be truly accessible, our healthcare system will need to change first.

Until next week,

Laura

If what you learned today from these experts spoke to you or you’d like to tell us about your own experiences, please email us and let us know if it is OK to share your thoughts with the larger Group Therapy community. The email GroupTherapy@latimes.com gets right to our team. As always, find us on Instagram at @latimesforyourmind, where we’ll continue this conversation.

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More perspectives on today’s topic & other resources

This 45-minute documentary by Vice dives into the struggle between pharmaceutical companies, nonprofits and other entities on who gets to control and profit from psychedelic therapy. Another short doc by Vice explores what legal psychedelic therapy and access will be like in the U.S., and whether it will be accessible. I thought that these were good primers on the psychedelic therapy landscape.

Other interesting stuff

Pulitzer Prize-winning writer Jennifer Egan chronicles the lives of chronically unhoused New Yorkers getting a new lease on life at a supportive-housing facility that comes with a gym, a computer room, and on-site mental health and medical services. “Even with elaborate coordination and information-sharing, though, the process of transitioning someone from the street into housing is patchy and precarious at best,” Egan writes.

Writers and actors aren’t just striking. They’re grieving too, writes Maria Prudente for The Times. Rebecca Feinglos, educator, advocate and founder of Grieve Leave, has been facilitating meetings in downtown L.A., providing writers and actors a safe space to open up about their feelings of loss during the Hollywood strikes. SAG-AFTRA members may hesitate to describe their experiences as grief, “and yet, that’s exactly what it is,” Feinglos said. “They’re losing out. They’re feeling a loss every single day not doing the thing that they love.”