If you have the option to change your heat sink to something that mounts similar to CPU coolers (meaning uses 4 screws on sides of a square rather than directly bolting to the TO-220 tab), you can use a through hole thermistor (most of them are small enough to fit through the hole, but check that the diameter is smaller than 3mm before purchasing). this will be a lot cheaper because thermistors are common as mud, it also removes the sil pads and gives you more space on the PCB (given your heat sink is small enough).
for better heat dissipation I can also recommend to solder the package with the tab side up, so it's directly contacting the heat sink. something similar to this video (skip to 8:45):
however if your project is final and you have purchased heat sinks in bulk, this makes little to no sense to change your entire design. the best approach would be to buy TO-220 mountable thermistors (again they are mot likely electrically isolated for the most part, but check your specific part before purchasing) similar to these:

they should still be cheaper than a digital chip. I hope that helps.