Psychedelic therapy is moving to the next frontier: workplace perk

Acupuncture and chiropractic care weren’t always the common fixtures of employer benefit plans they are today. It took clamoring from workers, the accumulation of evidence, and the slow realization by businesses that those perks would be popular with workers.

A similar evolution could be in store for psychedelic-assisted therapy for mental health conditions. Health insurers are years away from covering the interventions, but employers — eager to offer whatever perks might entice talent — may be poised to do so much sooner. And now, a Boston-based startup called Enthea wants to speed up the adoption of this benefit by self-insured employers — though data to support the effectiveness and safety of these treatments are still limited.

“Employers will add things to what they offer employees based upon what they hear their employees saying they want, especially in competitive job markets like we have right now,” said Paul Fronstin, director of health benefits research at the Employee Benefit Research Institute. “So in some respects, this fits in.”

Even as ketamine clinics proliferate for the treatment of conditions like depression and post-traumatic stress disorder, their use is largely restricted to people with the means to shell out thousands of dollars. Enthea is hoping to make psychedelic-assisted therapy more broadly available.

“There are still no standards of treatment and there’s still no way to create access,” said Sherry Rais, Enthea’s CEO and co-founder. “That’s why Enthea is bridging these gaps. There’s so much I’m excited about.”

Enthea is a third-party administrator that charges businesses for access to its list of vetted providers, plan designs, and clinical policies. The company got a lot of attention earlier this year when it signed the soap company Dr. Bronner’s, which supports psychedelic initiatives including the ballot measure for legal magic mushrooms in Colorado, as its first customer. But despite the high-profile client, Rais said the small, not-for-profit operation “ran out of money” not long after and shut its doors to new customers until it could turn things around.

Now, refueled with $2 million in seed funding and retooled as a public benefit corporation, Enthea is announcing an ambitious expansion: The company plans to enter 40 markets, sign 100 new customers, and add 80 ketamine providers to its network by the end of next year.

Psychedelic-assisted therapy is currently limited to ketamine and its chemical mirror, esketamine, as these are the only such drugs approved by the U.S. Food and Drug Administration. Esketamine, which was created by Johnson & Johnson, is the only psychedelic approved for treatment of depression, while ketamine has FDA clearance as an anesthetic and is used off-label as a mental health treatment.

When it comes to prescription drugs, sometimes the off-label use is more common than the on-label one, said Sabrina Corlette, a research professor at Georgetown University’s Center on Health Insurance Reforms. In those cases, it’s up to the health plan or employer to decide whether they want to cover the off-label use.

“There may be market demand and insurers feel like they have to offer it to maintain competitiveness,” she said.

Not everyone agrees focusing on individual employers is the best way to expand access to psychedelic-assisted therapy. Compass Pathways, a mental health company with the most advanced clinical trials on psilocybin for treatment-resistant depression, shares Enthea’s goal of expanding access, but it’s taking a different approach: traditional insurance coverage.

To that end, Compass and MAPS Public Benefit Corporation, the organization behind the most advanced trials on MDMA, recently submitted an application to the American Medical Association for a current procedural terminology code for psychedelic therapy that accounts for the lengthy, 6- to 8-hour treatment sessions. CPT codes allow providers to bill insurers for services.

“If there’s going to be broad and equitable access, the route for that is payers,” said Steve Levine, Compass’ senior vice president of patient access. “This needs to be covered through insurance.” He said broad coverage was more efficient: “Outside of that, you’re going one by one and selecting for a rarified group of payers.”

There’s no formal licensing or accreditation program for ketamine providers. The dozens of ketamine clinics in operation vary widely in how thoroughly they screen patients, leading some experts to worry they’re offering the drug to anyone who can afford it, a 2018 STAT investigation found. In many cases, STAT found clinics didn’t have psychiatrists or other mental health professionals on staff, even though they’re working with patients who may have had suicidal thoughts.

That’s why Rais maintains the most important service Enthea offers employers is its credentialing process. The company examines several aspects of providers’ operations to ensure safety, including where they were trained, what licenses they have, how long they’ve been providing services, whether they have malpractice insurance, and whether they’re under investigation.

“We kind of take a holistic look at their business and then we can credential them,” she said.

Right now, Enthea has just one provider in its network, Flow Integrative, the company that Dr. Bronner’s uses. But it has received letters of interest from more than 90 providers in 26 states and is busy working through the list to credential them. In January, the company will launch services in New York City, Austin, Texas, and the San Francisco Bay Area.

On the customer front, Enthea has received interest from 32 employers spanning a range of industries, including personal wellness, food, software, and even finance. The company says it’s also signed a handful of new clients, including Tushy, which makes bidets, and Daybreaker, a company that hosts sober morning dance parties.

“The commonality is they, I hope, care about the wellbeing of their employees and want to do something to help their employees’ mental health, and just that says a lot,” Rais said.

Once employers decide to offer the therapy as a benefit, employees can search the list of nearby in-network providers. The provider they pick assesses them and sends the information to Enthea, which determines if the patient is eligible for treatment. Though ketamine hasn’t been approved by the FDA for any mental health condition, Enthea authorizes ketamine treatment for eight conditions, though Rais said employers can narrow that list. The conditions include treatment-resistant depression, major depressive disorder, bipolar disorder, PTSD, generalized anxiety disorder, social anxiety disorder, substance use disorder, and adjustment disorder.

Esketamine has been approved only for treatment of depression.

One safety concern with use of psychedelics for unapproved conditions is that the vast majority of clinical trials of psychedelics exclude participants with a risk of psychosis — including those who have a relative with bipolar disorder or schizophrenia — out of fear that psychedelics could trigger psychosis.

“Ketamine and bipolar is a potentially dangerous combination,” said Boris Heifets, a neuroscience researcher at Stanford University who studies psychedelics. “I don’t think it’s well enough researched to administer ketamine to bipolar patients, especially someone who recently had a manic episode.”

The lack of data around the connection to psychosis makes treatment of bipolar disorder with ketamine particularly uncertain; of the studies that exist, some try to minimize the likelihood of a switch to mania by requiring participants to be on a mood stabilizer. A 2021 review of psychedelic literature identified 17 cases of adverse events that seemed to involve mania, and researchers last year found high-dose ketamine triggered hypomania in at least one participant with a bipolar II diagnosis.

Rais said Enthea includes bipolar disorder among its covered conditions because research suggests ketamine-assisted therapy can be “quite effective” during the condition’s depressive phase. She said the company would discuss possible risks with the prescribing clinician before treatment and “would not authorize treatment for patients where we believed there was risk of mania or psychosis.”

Ketamine treatments cost an average of $8,000 among the providers Enthea has spoken with, Rais said. That includes medical and psychiatric evaluations, one to three prep sessions, four to six medication sessions, and six to eight integration sessions, which refers to therapy to process the ketamine experiences.

Employers decide for themselves how much of the treatment they want to cover versus how much workers cover. Dr. Bronner’s, for example, is covering 100% of the treatment cost, but others might choose to cover 75%, Rais said. Enthea charges an 8% fee for its services.

Enthea says it plans to expand to other psychedelics, including MDMA and psilocybin, if those become FDA-approved.

Marik Hazan, managing partner with Tabula Rasa Ventures, the psychedelic-focused venture capital firm that led Enthea’s seed fund raise, agrees securing insurance coverage is crucial, but he thinks Enthea’s approach of starting with employers is an important first step. It’ll allow the company to collect data on how well the therapy works and whether it’s cost-effective.

“It’s hard for me to imagine an opportunity that will be as impactful to people’s abilities to access psychedelic therapy in the future than a company like Enthea,” Hazan said.

Realistically, a relatively small number of people will benefit from what Enthea’s offering, said Elliot Marseille, director of the University of California, Berkeley’s Global Initiative for Psychedelic Science Economics. His research has found MDMA treatments for PTSD patients could save health insurers millions of dollars, mostly because chronic medical conditions like diabetes and cardiovascular disease tend to improve as PTSD improves.

Natalie Gukasyan, a psychiatrist and post-doctoral research fellow at Johns Hopkins University who’s researching the feasibility and efficacy of psilocybin-assisted psychotherapy, agreed that this kind of insurance plan seems unlikely to be widely used.

“Who’s going to sign up for a super specialized insurance company, apart from people who think they need a lot of psychedelic therapy?” she said.