Three kinds of ketamine treatment
Three different treatments share the word ketamine, and insurance treats each differently. At-home ketamine is usually sublingual (under the tongue) compounded racemic ketamine, prescribed through a telehealth provider and taken at home. At-home ketamine treatment is also called at-home ketamine therapy — the two words describe the same thing, and insurers treat them the same way. IV or IM ketamine is given by infusion or injection in a clinic, for depression, anxiety, PTSD or chronic pain. Spravato is esketamine — a derivative of ketamine — as a nasal spray, self-administered in a certified clinic under supervision.
The difference that decides coverage is FDA approval. Ketamine has been FDA-approved as an anesthetic since 1970, and it is on the World Health Organization's List of Essential Medicines — but using it for depression, anxiety or PTSD is off-label prescribing. Spravato was approved by the FDA in 2019 specifically for treatment-resistant depression, and later for adults with major depression who are having suicidal thoughts.
Why at-home ketamine is usually not covered
Because at-home ketamine for mental-health conditions is off-label, most insurance formularies exclude it. The treatment uses compounded racemic ketamine, which has not undergone FDA review for safety, effectiveness or manufacturing consistency, so it should be used only under clinician oversight and supplied by a regulated US compounding pharmacy. Insurers treat off-label depression use as not medically necessary, and the at-home route is mostly self-pay through telehealth subscriptions.
That does not mean the treatment is unavailable — it means the bill is the patient's. Before starting, the questions to ask are what the subscription covers, what happens if the dose needs adjusting, and what clinical oversight is included, because the answers vary widely between telehealth providers.
Spravato: the covered route, with conditions
Spravato is the one ketamine treatment that insurance commonly covers, and the conditions are specific. It is administered in a certified healthcare setting under the FDA's Risk Evaluation and Mitigation Strategy (REMS) programme. The patient self-administers the nasal spray in the clinic, is monitored for about two hours afterwards, and arranges a ride home — driving after a session is not allowed.
Coverage typically requires documented failure of two or more antidepressant trials, a diagnosis of treatment-resistant depression or major depressive disorder with acute suicidal ideation, and prior authorisation from the plan before coverage is confirmed. It is taken alongside an oral antidepressant, not instead of one. Most commercial plans cover it on those terms, and Medicare Part B may cover it when it is administered in a REMS-certified facility for an approved indication.
Medicare and Medicaid
Medicare Part B may cover FDA-approved Spravato when it is administered in a certified clinic, for an approved indication — the patient is then responsible for the usual Part B cost-sharing unless a supplement covers it. Off-label racemic ketamine, whether administered by IV or at home, is generally not a Medicare-covered benefit for depression. Medicaid coverage of Spravato varies by state and plan, and the same prior-authorisation and treatment-resistance conditions usually apply.
What to ask before you start
Four questions settle most of the coverage picture. Is the drug on-label or off-label for your diagnosis? Does the plan require prior authorisation, and what documentation does it need? What does the facility fee cover, and is the monitoring time billed separately? And if the plan denies it, what is the appeal route — the health claims guide on this site walks through appeals, starting with the insurer's own process. Ask all four before the first session, not after the first bill. Comparing plans is the other lever: the health insurance comparison tool on this site lets you check whether another plan treats the treatment differently.
Worked example
Consider two ILLUSTRATIVE patients with treatment-resistant depression. The first starts at-home sublingual ketamine through a telehealth subscription: the plan does not cover it, because the use is off-label and the drug is compounded, so the patient pays the subscription out of pocket. The second is referred for Spravato: the clinic confirms the diagnosis and the two failed antidepressant trials, obtains prior authorisation, and the sessions take place in a REMS-certified facility with two hours of monitoring — and the plan covers the treatment on those terms. The example's value is the fork in the road — same condition, same drug family, different FDA status, different coverage — not any price in it, and no real patient, clinic or plan is described.
Illustrative example only — not a fact about any real policy.