Virtual Reality Therapies: Funding & Payment Considerations in the US

Guest Authors Helene Louys and Pol-Antoine Hamon

“Funding and payment considerations for Virtual Reality therapies or treatment in the US” is the second in a series of contributions from external experts excited to participate in the educational mission of VRforHealth. In this article, the authors describe the funding framework for commercializing VR solutions in the United States. The authors’ profiles can be found here: Hélène Louys and Pol-Antoine Hamon. Hélène Louys is a Doctor of Pharmacy and a lawyer, with 15 years of practical experience in both the regulation of health products globally and the practice of health law. Pol-Antoine Hamon is a hospital pharmacist and MBA with 20 years of experience in health product market access. 

Financing of healthcare in the US is based on the value of the therapeutic act

The financing of virtual reality in the United States is, as for other therapies, the remuneration of the therapeutic act. The health professional or  healthcare establishment is remunerated by public or private insurance . Therefore the health professional or the establishment bears the financing of the software, the subscription and the viewing device.

A Coding system determines the remuneration

Remuneration for treatments is determined by coding medical procedures, based on the CPT (Current Procedural Terminology) code and the ICD (the International Classification of Diseases) code. 

CPT is a uniform coding system developed by the American Medical Association (AMA). CPT coding tells insurance payers what the healthcare professional is billing and therefore wishes to be paid for. CPT codes, along with the ICD codes, paint a complete picture for insurance payers. In a behavioral health setting, CPT codes provide the length of a psychotherapy session, for example, or an intake interview

Each Medicare, Medicaid or private insurance payer will refer to the codification of the act by CPT Code to associate an amount billable by the health professional. The CPT Codes are a nomenclature of medical acts that evolve according to improvements in care. 

What are the three categories of CPT Codes?[1]

Category I: Most healthcare professionals spend the majority of their time working with Category I codes. The six sections of the CPT Codebook are Assessment and Management, Medicine, Surgery, Radiology, Anesthesiology and Pathology, and Laboratory. Each field has a unique set of guidelines. Category I CPT codes have five digits.

Category II: Category II codes contain four digits, followed by the letter F. Category II codes are optional. They provide additional information and do not replace Category I or Category III codes.

Category III: Category III codes are temporary and represent new or experimental procedures or technologies. For example, if you cannot find a new procedure in category I, you can use a category III code. Category III codes have four digits and end with the letter T.

What is the status of Virtual Reality in reimbursements in the US?

Virtual Reality therapies are gradually being integrated into the new codes. Payers in the United States will examine the therapeutic act that treats or corrects a medical condition, for which the supervision of a health professional is necessary.

Before 2019, there was no direct mention of the use of Virtual Reality in the treatment of pathologies, although this technique and associated devices were already being used. In order to get paid and finance devices and software, healthcare professionals were forced to use CPT-code by “assimilation.” This was particularly the case for the “Exposure Therapy” code which does not mention the use of VR although health professionals had sometimes invoiced with this code, in order to be remunerated. A good example is XR Health who negotiated insurer by insurer for coverage based on existing codes. The insurance companies accepted this extension of the use of CPT codes to promote reimbursement, allowing coverage for more than 70 million Americans![2]

Since 2019, we noted the appearance of new codes that take into account the use of digital solutions for patient care such as remote medicine. This is an important change. The nomenclature now includes these new treatments which opens the way for other digital solutions such as Virtual Reality therapies. Many codes are being discussed and written to accompany this change. Decisions at the September 2021 “Editorial panel meeting” made it possible to consider the provision of specific coding for virtual reality therapy. We thus expect a new Category III code to be effective by January 2023: “Augmented reality mobile application for rehabilitative pain management.” As mentioned above, payers are engaged in changing coding to better reward improved patient care with digital health solutions in general and virtual and augmented reality in particular. Other than the case of XR Health cited above, only 17.6% of Care Providers today  indicate that they are able to charge for virtual reality sessions.[3]

Clinician input is very valuable and plays a key role in evaluating the price of a code CPT. When a new code is approved by the CPT Editorial Panel of AMA, the professional organization that represents healthcare professionals or healthcare facilities that offer a medical procedure including  Virtual Reality, will conduct a survey to determine the value of the CPT code. The survey is completed by a randomized sample of clinicians whose practice includes Virtual Reality therapies. 

The value is based on several factors[4] such as:

• The time of the procedure

• The intensity or complexity of the procedure

• The level of professional skills required

Medico-economic approaches will document the pricing strategy. Here is an example of a study that illustrates the method and expected results and is presented to stakeholders: “Cost-Economic analysis of implementing virtual reality therapy for pain among hospitalized patients” [5]. 

The main result  is the following:

• Implementing a hospital-based virtual reality therapy program saved an average of $5.39 (95% confidence interval -$11.00 to $156.17)  per patient. compared to usual care.

• Among the subgroup of patients who were both eligible and willing to use VR therapy (19.3% in the base case), there was an average of $98.49 in savings per patient.

• For patients who did not receive VR therapy (80.7% of patients were ineligible or did not accept), the hospital lost $16.90 per patient.

The professional organization will review the results of the professional and care provider cost studies and of the medico-economic studies and will make a price recommendation to the AMA who will then submit to the CMS[6] (The Centers for Medicare & Medicaid Services which is part of the Department of Health and Human Services or HHS). CMS will set the prices for each CPT code for public insurance programs. The fixed prices are typically monitored by private insurance. Payers have pledged to support health professionals for justified remuneration for the use of digital health services and recently  for virtual reality. 

We expect to see virtual reality therapies gain in mentions in the CPT code. We are also expecting new CPT codes,  followed by pricing and reimbursement.  In sum, the future is bright for the practice of Virtual Reality therapies, thanks to a simplified remuneration for health professionals in the USA. 

WIth thanks from VRforHealth to Pol-Antoine Hamon and Helene Louys!

If virtual reality technology is consolidating its status for wellness and therapeutic uses, it is thanks to the efforts of academic researchers and clinicians, start-ups creating solutions, patients participating in research, regulatory officials who are reviewing the efficacy and tolerance of these solutions, and consultants who accompany these efforts. Our humble appreciation for the guest authors from the “village” it takes to advance these new solutions. Denise Silber