Insurance coverage for psychedelics: 5 Questions for Enthea co-founder Sherry Rais

Rais on how psychedelic insurance coverage works and the company’s plan for growth.

Sherry Rais is the child of immigrants — her mother is from Tanzania, and her father is from Pakistan — and from a young age, she’s felt lucky in life, and wanted to pay that feeling forward. As an elementary schooler in Canada, she spent her time volunteering at shelters and retirement homes; when she headed to McGill for college, she majored in neuroscience and international development to prepare for a career improving mental health in developing countries. She went on to consult the United Nations and the World Bank on cash transfers in Africa, Asia, and South America, but after a decade, she took a sabbatical and returned to Canada where she became intrigued with emerging psychedelic science. 

In 2020, Rais, along with business experts Joshua Barber and Keith Lietzke, as well as psychiatrist Dan Rome, co-founded Enthea to provide insurance coverage for psychedelic-assisted therapy. The Microdose spoke with Rais about how psychedelic insurance coverage works, the company’s plan for growth, and how they’re planning to adapt to psychedelics’ quickly-changing legal and regulatory landscape.

How does Enthea’s coverage for psychedelic-assisted therapy work?

If you started working for a company, part of the onboarding process is going over what they offer for health, vision, and dental insurance. The company would say they also offer coverage for psychedelic-assisted therapy as part of their mental health benefits. 

Just like health, dental, or vision coverage, employees taking advantage of that psychedelic-assisted therapy coverage don’t do so directly through their employer. That would be weird! There are HIPAA compliance rules, which is why you have a third party company like Enthea to manage it. Employees would log in to Enthea’s portal, then see which providers are in their area and within our network, and pay their co-pay. For instance, in the case of Dr. Bronner’s, our first client, they cover ketamine-assisted therapy 100%, so there’s no co-pay for employees.  Then we work with providers to authorize treatment and payment. 

What’s the process for providers joining the Enthea network?

We spent the first two years developing that foundation. Third party administrators of any medical benefit need to create processes to credential and vet providers, and create medical policies to dictate standards. Because this industry is so new, there are no industry-standard benefits. We created our own medical policies and standards to vet credential providers, which were developed with an expert panel and medical policy committee. That process includes things like checking to see that they are part of other provider databases, that they don’t have any lawsuits filed against them, that they have the licenses and insurance coverage they need, and that they were adequately trained.

Dr. Bronner’s soap company is Enthea’s first, and so far only, client. What has Enthea learned from that partnership, and how might that inform your next moves?

We knew we had a lot of employers and providers interested in our network, but before rolling out nationwide, we wanted to test and prove that our system works. So we piloted with Dr. Bronner in January. That went well — we collected data and learned that 8 percent of those covered are using the ketamine-assisted therapy benefit. That was really important because we needed to forecast how many people would use this benefit to know how many providers we needed in our network. Of course, Dr. Bronner’s is a very psychedelic-friendly company, so we are not assuming that 8 percent will hold true for all companies, but it’s still a good piece of data for us to have. Over time, we also want to look at how this benefits workforce productivity, attendance, and attrition. 

As a team, we also wanted to test our operating model: how long does it take to reimburse providers or manage authorization requests? Figuring out how much time each step takes helps us figure out how we need to grow. We’re now in a position to go on and extend our work to other clients, but we’ve put a pause on growth because as a non-profit, we ran out of money. We didn’t start working with other employers because we didn’t think it was ethically responsible. But now we’re a public benefit corporation, so we can raise investor capital, and we’re about to close our seed round. 

We already have letters of interest signed from 26 companies, and we’re in conversations with an additional 14 companies. These businesses are located all over the states, and the average employee size is 350. There are some familiar, psychedelic-friendly companies, like Field Trip and MindMed, but also others, like Shopify and Asana. We plan to be working with 100 employers by the end of next year in 40 different cities, and with 300 employers in 80 cities by the end of 2024. 

Currently, ketamine treatment is quite pricey. How are you thinking about equity when it comes to access to psychedelic-assisted therapy?

From the beginning, I’ve been interested in making sure people in developing countries get in on psychedelic-assisted therapy. At Enthea, we want to consciously build a provider network that has racial, gender, and other aspects of diversity. The way to treat diverse communities is to have diverse providers; researcher Monnica Williams has shown that in her work. (Read The Microdose’s 5 Questions for Monnica Williams.)

We have also created a Patient Assistance Fund for individuals who can’t afford psychedelic-assisted therapy, who are uninsured, or who don’t work for an employer who offers coverage. That’s something we’ll look at more after our seed round is complete.

There’s lots of anticipation that the FDA could approve MDMA or psilocybin therapy. Would such an approval change Enthea’s business model?

When an insurance company approves treatment, they need two things. First, the therapeutics must be evaluated and approved by a therapeutic committee. Second, they must have credentialed, contracted providers who are trained to do the therapy. 

FDA approval would only represent half the picture here; that approval would be just for the medicine, and it doesn’t guarantee insurance coverage. It’s just one small step of many steps that larger insurance companies will have to take before covering psychedelic-assisted therapy. 

They would still have to put together a specialized provider network, and vet and credential them. Insurance companies know how to act quickly when a new drug is approved, but building up a network of specialized providers? They’re not set up to do that. 

That’s what we do, and that’s at the heart of why Enthea was formed. We realized that even if these drugs receive FDA approval, insurance companies would need years before they could build such a network. Even if an employer wanted to sign up to provide those benefits for employees, major insurance companies wouldn’t be ready. What would happen to people who want that therapy? 

This interview has been edited and condensed for clarity and length.