Psychedelic therapy providers get creative as costs trip up patients

As evidence of psychedelic substances for treating psychiatric conditions grows, local practitioners are noticing increased interest from the public. Access to such treatments, however, remains challenging.

In recent years, psychedelic substances have been closely studied for psychiatric conditions such as depression or trauma. While ketamine is currently the only psychedelic therapy commercially available and not through a clinical trial, its access is cost-prohibitive.

"It's historically expensive for patients because it was usually not covered by insurance," said Dr. Amanda Itzkoff, CEO of Curated Mental Health, a clinic that offers ketamine therapy. Today, while there are instances where insurance can cover ketamine therapy, reimbursement structures might reserve that access only to the affluent, she noted. Otherwise, patients have to resort to self-pay.

Clinics in the city providing psychedelic therapy say such treatments should not be reserved for the rich. They say they are devising ways to lower the cost of sessions, or ways to engage with insurance. They are laying the groundwork to bridge access with ketamine for now, but are also setting the stage for the future when other psychedelic therapies, such as with psilocybin or MDMA, become available, they say.

Ketamine is the only psychedelic substance that has an approval from the Food and Drug Administration—albeit not for use in the treatment of psychiatric conditions. In its label, ketamine is approved as an anesthetic in surgical procedures only.

Using ketamine for psychiatric conditions would be considered "off-label," Itzkoff said."But off-label use means insurers have the liberty of not covering it should they choose not to, because the FDA has not backed it."

Ketamine will almost certainly never receive "on-label" status because it has been a generic drug for decades, and no drug company will want to undertake the expense of putting the drug through trials for that approval when there is no exclusivity to be enjoyed, Itzkoff added.

Self-pay is common for ketamine infusions, and price tags in the city can range between about $500 to $1,000 per session, according to rates posted by local clinics.

As ketamine infusions for psychiatric conditions require multiple sessions—typically six or more—the cost is prohibitive for those who are lower income, said Richard Meloff, co-founder of Nushama, which offers ketamine and wellness services.

It can be an uphill battle to get insurance to cover ketamine treatments. "We worked really hard on our relationships with payers to ensure we're delivering evidence-based care, and they're finally coming around," Itzkoff said. Curated, with four clinics, including its flagship in Chelsea, is in-network with Cigna, Aetna and UnitedHealthcare.

"The burden falls on the provider to supply the evidence to the payer to cover the treatment off-label, and that requires a lot of staff and infrastructure to compile that evidence," Itzkoff said. Curated has a team of 30 people solely dedicated to collecting such data to persuade payers to cover the cost.

Medical literature includes clinical trials that have shown ketamine's benefit in depression, anxiety and post-traumatic stress disorder.

"The requirements to put together such evidence is a huge barrier for small offices, that's why many don't bother with being in-network," Itzkoff said.

Pursuing insurance coverage also means additional cost needed to ensure each facility that delivers the infusions and its staff are properly credentialed by the payer, Meloff said. Nushama, which has four locations, including its flagship in Midtown, uses only its Upper East Side location for patients accessing ketamine services through insurance, he said.

Even if it is covered by insurance, negotiated payment rates for using ketamine can be lower than if the provider had used other treatments instead, making being in-network even less attractive, Itzkoff noted.

"We're not looking to make a killing," she said. "We're looking to deliver this service for people who need it and keep our doors open."

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Nushama and Curated have payment arrangements for patients who are unable to afford their services, but they're trying creative approaches to lower barriers further.

"Psychedelic treatment should not be reserved only for the rarefied few who can afford it," Meloff said.

Ketamine therapy is typically a one-on-one setting, including its infusion and integration—where a therapist provides counseling support afterward. Nushama is exploring group settings for both components.

Using one room for six to eight people rather than for one person provides operational savings, which can be passed on to the patient, Meloff said. More staffing will be required in a group infusion setting, but not equivalently more, he said.

"A two-hour treatment remains a two-hour treatment, even if more people are in the room," he explained. Special care will be needed to set up a room that ensures an effective and safe infusion session in a group setting, he added.

Curated is exploring group settings for just the integration component. The model is similar to group therapy that exists already. Group settings might achieve cost savings for patients using self-pay, or for those who have not yet met their deductible on their insurance, Itzkoff said. For those with a standard co-pay or who have all costs fully covered by insurance, however, they would likely not see any difference in out-of-pocket costs, she said.

Both Meloff and Itzkoff said that group integration was being considered beyond just cost considerations. Group therapy can be highly effective for people with shared experiences or trauma, they said.

As part of Curated's efforts to explore group settings, it partnered with Brooklyn Minds Psychiatry, with locations in Midtown and Williamsburg, on April 19. Brooklyn Minds has an expertise in group therapy and has providers credentialed by commercial payers, Medicaid and Medicare. By partnering, ketamine and therapy services can be available at both organizations' locations, along with shared resources for back-end processing and administration, Itzkoff said.

While it is a struggle to make even ketamine accessible, setting the stage is important for when other promising psychedelic compounds, such as psilocybin or MDMA, become accepted as treatment, Meloff said, adding those forms of therapies can have similar protocols with ketamine.

"We've already started designing our spaces in mind for both MDMA and psilocybin," Itzkoff said. There are specific hurdles unique to those compounds—psilocybin therapy can last up to eight hours and there are city zoning restrictions to how long a patient can be kept on-site, she explained.

"Our challenges will be similar [with ketamine's], but I believe if we gain ground now with payers and the city, we will be in a good position to make those arguments for those treatments in the future," Itzkoff said.

This story first appeared in our sister publication, Crain's New York Business.