California-based virtual reality therapeutic company AppliedVR received a unique Healthcare Common Procedure Coding System (HCPSC) Level II code from the Centers for Medicare and Medicaid Services for its RelieVRx system (formerly EaseVRx) to treat chronic low back pain. 

Josh Sackman, president and cofounder of AppliedVR, joined MobiHealthNews to discuss the new reimbursement code and what's in store for the VR company. 

MobiHealthNews: How did the CMS code come to fruition? 

Josh Sackman: So part of our reimbursement strategy from the start is to make virtual reality treatment be prescribed and reimbursed like any other medicine or device for chronic pain. It meant really thinking through the regulatory pathway to allow this to have claims and have the safety and efficacy and credibility behind it for doctors to start to adopt. And so, in 2021, we checked that box and got our first authorization with the De Novo. 

Then the second box, getting this actually paid for, like a drug or device in the system, meant thinking through that reimbursement pathway, and CMS is such an important driver of adoption. 

What's nice about how we regulated RelieVRx is it's the hardware and software combined as an integrated therapy. And the hardware got subjected to all the safety standards that any medical device would, to make sure [of] electromagnetic compatibility, and battery safety, and all the things that you worry about when you put a device into a chronically ill patient's home.

And so we bundled up this story to CMS and said, "We think this fits all the requirements of durable medical equipment." The reason that was important to us is, there isn't a benefit category for digital therapeutics as it stands today. 

But until there's a legislative change, and there's an act going through Congress, there's not actually Medicare reimbursement that can come with it. And so we made this petition that defined all the requirements of RelieVRx as the predicate for this category now, and said, "We meet the definitions of durable medical equipment, we have this evidence base, and we have these experts that show this unmet need and how it's being used in the system."

And we were pleasantly surprised that they came back with our first application and granted this new code for us.

MHN: What does the code mean to you?

Sackman: Yeah, so the code serves a few different purposes. So, first, the most important thing is it establishes the category for our device under an existing benefit category of durable medical equipment. That means we can actually tap into a Medicare reimbursement pathway for RelieVRx.

And this is the first step to start the next process, which is to talk about pricing and how to actually get a price assigned in the system to then set up the third step, which is coverage.  

Once those three different parts of this coverage manifest, it provides a lot of clarity for the payer systems to understand how this is categorized, what a benchmark price is and roughly to assess what patients are eligible for this therapy. That makes it easier to write the coverage policies for all the other types of health plans out there.

And it's not specific to AppliedVR. The category is "virtual reality cognitive behavioral therapy device," and so that applies to so many different therapeutic needs in the marketplace. What it does establish is, in order to tap in the code, you need to have your Class II FDA authorization. So it is for a specific regulatory classification device. And your product has to leverage the techniques mentioned in the code – cognitive behavioral approaches.

MHN: Can you tell me about the contract AppliedVR was awarded from the VHA Innovation Ecosystem?

Sackman: So as we got the FDA authorization to bring a product into the market, and [the VA Innovation Ecosystem] proactively came to us.

And so, right now, they committed to a couple 100 devices across the different VHA innovation sites. And from there, we hope to be able to expand. We do have some news that should be dropping shortly about what that expansion looks like beyond that initial testing period.

MHN: So what are the next steps for you? 

Sackman: It really is about market access. So the VA is the first early adopter health system and health plan to pay for and prescribe for this, hopefully soon at some form of regional or national scale.

We're in piloting territory with a number of national and regional health plans. There is one health plan that mentioned last year that they're starting to cover some prescription digital therapeutics. And so we're hoping some of these health plans actually have coverage policies sometime this year. 

And then we're also looking at things like expanding our label beyond chronic low back pain and things that ultimately allow more patients to be able to tap into access to this technology. So, you know, we believe there's enough clinical evidence to demonstrate how it works and that it works. And now it's about getting all the commercial partners to get on board with how this gets prescribed and paid for.