This is an exclusive BHB+ story.
Biomarkers could give behavioral health providers an alternative to subjective survey-based diagnosis — but reimbursement barriers remain. Right now, both investors and providers see them as more of a strategic and operational differentiator than a routine clinical standard.
That could change as several players in the sector are actively working to refine blood biomarker tests, hair analysis and digital biomarkers from wearables to inform reliable care strategies.
Currently, their addition is a value-creation add-on layer. But biomarkers are gaining traction.
While clinical adoption has been slow, the American Psychiatric Association recently outlined how biomarkers could enhance diagnostics and inform treatment, a potential direction for where the industry is headed.
“There is a big gap when it comes to biomarker usage in the behavioral health and mental health area… there is a lack of biomarkers [and] metrics in the space, and I think that’s where we’re trying to not only do the research… but also then to translate those metrics into the clinic,” Dr. Ash Anwar, the co-founder and senior director of scientific research and development at Molecular You, told Behavioral Health Business.
Molecular You specializes in blood biomarker profiling that assesses overall disease risk. The company partners with behavioral health clinicians to identify underlying factors that may influence mental health conditions.
Research around the use of biomarkers in mental and behavioral health diagnostics is still emerging, but a 2024 study found that increased investments in biomarker development in mental health “could lead directly to dramatic health improvements.” Researchers specifically cited multi-modal phenotypes, new mental health-related sensing modalities, attention to biomarkers for understudied populations and the incorporation of AI across those buckets could move the needle forward for new care interventions.
For a field that has historically based diagnoses on symptoms rather than precision-driven biomarkers, this could be a winning strategy for measurement-based care, payer contracts, clinical workflows, patient outcomes and lowering the costs of care.
“There is a huge burden to the health care system and a financial cost when it comes to not being able to address or detect early, especially when it comes to mental health,” Anwar explained.
The case for reimbursement
From a workflow perspective, adding biomarker testing into existing clinical workflow frameworks wouldn’t be overly cumbersome. If at some point these testing capabilities reach a level of scale and standardization in the field, Anwar said it would be pretty simple for clinicians to order a standard blood test to look at immune system reactions, inflammation and stress hormones. Those are where advancements are happening most quickly for behavioral health, as well as with metabolic and gut microbiome markers, too.
“It is quite routine to add [biomarker testing] into clinical workflows… it works very much like when you just go into your family doctor and they require a standard blood test,” Anwar said. “Our model is definitely very aligned with the clinical workflow.”
Clinician adoption is another key barrier for the devices, as behavioral health biomarkers are traditionally not taught in medical school.
“We’re slowly getting a growing proportion of clinicians who are interested in deeper biology, and now that we’ve been around for 10 years, we have really high‑profile case studies we can routinely point to,” Anwar said.
There’s also pushback from a reimbursement lens, which makes scaling these capabilities a challenge of the moment.
“We face a lot of pushback when it comes to reimbursement, even though I feel like there is such a good business case,” Anwar said. “If we just look at autism cases… early interventions, early reduced symptoms will have such an immense long‑term cost benefit to the health care system.”
Executives at Linus Bio, a company focused on developing hair-based molecular testing and early detection for neurological and behavioral health conditions like autism spectrum disorder, explained similar challenges.
Even though the company’s testing capabilities can increase throughput and cut wait times, its hair strand testing for autism is out-of-pocket cash pay, and payment must be given up front, which is challenging for many families. It has been in talks with some insurers, but nothing is reimbursable quite yet.
The company’s platform Strand DX has received a breakthrough designation from the Food and Drug Administration, but full FDA approval is pending, which will strengthen payer confidence and make reimbursement more likely, Dr. Manish Arora, the company’s CEO explained. But he is confident that the evidence is there.
“We are reaching out to insurance companies, building our evidence, so we already have a lot of clinical evidence,” Arora told BHB. “Now we need to build the economic evidence. What are the long-term cost savings? Once that’s ready, I’m optimistic that sometime next year, we would get insurance coverage by the larger providers.”
Both LinusBio and Molecular You are working at the intersection of AI and biological data to advance testing in the behavioral health areas the 2024 study pointed to: moving toward a multi-modal mental health approach that integrates biological, behavioral and environmental information at scale for improved patient outcomes.
But without strong reimbursement pathways, as applications emerge for biomarker use cases in behavioral health, progress in this vein may be slow.
Interventional psychiatry startup Salma Health, which uses AI-powered coordination, clinical insights, neurobiological information and physiological and digital biomarkers to monitor brain health and inform care strategies, has reimbursement for these services akin to other areas of health care.
The company emerged from stealth last month with $80 million in the bank and pitches itself as a brain health company. It aims to integrate these capabilities into interventions and diagnostics to reduce care fragmentation across behavioral health.
Right now, it works with Stanford’s Accelerated Intelligent Neuromodulation Therapy, which provides MRI-guided diagnostics for treatment-resistant depression via precision stimulation. This procedure is covered by Medicare and California Blue Shield, but for patients without that coverage, assessments are made on a case-by-case basis, Dr. Brandon Bentzley, chief medical officer and co-founder of Salma Health, said.
“For people that don’t have coverage for that today, we’re doing on a case by case basis, because we’re willing to fight right for the best care for our patients and show the medical necessity of what we’re doing, but it does require a lot of extra work to make sure that that reimbursement comes through,” Bentzley told BHB.
But the research bill to further the company’s capabilities is fully funded by them.
“The hope is to continue to push that more of that stuff from the cutting edge into the foundational and the research the cutting edge and keep kind of pulling it down that pathway,” he added.
The investment case for biomarkers
While providers and medical device companies are still ironing out a reimbursement pathway, investors are placing bets on the sector.
Alaa Halawa, CEO of Salma Health and the head of health care at Mubadala Capital, a firm that co-led the company’s Series A round, told BHB that from an investor’s lens, the strongest case for investment lies in biomarkers becoming the enabler for more value-based care arrangements.
“Companies that are going to win are companies that are going to make patients better,” Halawa said. “We believe the integration of biomarkers in a systematic way in care delivery is going to achieve that.”
However, he explained that because the incorporation of biomarkers in behavioral health care is now in its “early innings,” it’s difficult to make the case for a value-based contract over biomarker precision into one condition like depression. But if a provider can take risks on a population and has a system that has strong biomarkers across conditions or can stratify patients into subgroups of diagnoses and route them to ideal treatment options based on brain health indicators, then that will move the needle.
“If we prove that, and if we prove that total cost of care is dropping because of our care models, we can go to payers, we can get better reimbursement, we can get risk-sharing pricing,” Halawa said. “We can even go take on full risk on that population. And if you do that, then you are going to create a valuable company, because you’re ultimately aligning your interest with the ecosystem of payers.”
That alone proves the investment case, he said.
For companies like Linus Bio, Arora echoed similar sentiments, particularly around cost savings as the impetus for investments.
“We can detect the risk at one month of age,” Arora said. “We’re the only technology in the world that can do that. My vision is that they should be rolled out as a universal screening tool… and we’ve done an economic analysis [that] if the government were to roll this out, instead of costing money, it would save a billion dollars a year, because by using existing interventions, therapies earlier in life… the severity of autism subsides.”
Without further research at this time, though, biomarkers in behavioral health remain a differentiator rather than a standard of care and proof will be the only way to move toward better reimbursement and stronger cases for investment.
“If you think of a world where value-based care expands into the world of brain health, which it doesn’t today … and you have superior outcomes because of the integration of brain health, then you could actually move into a value-based care business,” Halawa said.
More investor money is beginning to flow into the space. Some projections estimate that the psychiatric biomarker market could reach between $2.26 billion and $2.78 billion by 2031.