AppliedVR's latest partnership expands covered access to VR therapeutics for veterans, active military

AppliedVR is partnering with a government services provider to expand covered access to its virtual reality-based therapy through federal healthcare systems including the Veterans Health Administration and Indian Health Services.

The immersive therapy startup's partnership with Lovell Government Services will streamline the purchasing process for federal agencies like the Military Health System, VHA and IHS.

AppliedVR's flagship product, the RelieVRx program, was granted marketing authorization by the Food and Drug Administration in 2021 for chronic lower back pain. The program consists of a headset and software guiding patients in pain management exercises.

Through the contract vehicle with Lovell, RelieVRx has now been added to the Department of Veterans Affairs Federal Supply Schedule, Defence Logistics Agency's Electronic Catalogue for Medical Supply Chain (ECAT) and the Department of Defence's Pricing Agreement (DAPA), according to the company.

Lovell Government Services is a Service-Disabled Veteran-Owned Small Business that partners with medical, dental and pharmaceutical companies to expand access to products and services to veteran and military patient populations. As AppliedVR's government services vendor, Lovell will support expanded access to the company's therapeutic solutions among federal healthcare providers.

The partnership helps veterans and active military service members gain access to alternatives to opioids to manage chronic lower back pain through virtual reality, said Chris Lovell, Lovell Government Services CEO. "This technology has tremendous potential in the federal space," Lovell said.

AppliedVR inked a contract with the VA back in December that enables doctors at 18 VA facilities to prescribe the VR-based pain treatment solution to veterans for use in their homes. RelieVRx is the first and only FDA-authorized in-home immersive VR pain treatment indicated as an adjunctive treatment for chronic lower back pain, the company noted.

The company's work with the VA was facilitated through a contract with the VHA Innovation Ecosystem, which searches for and implements new healthcare innovations for the benefit of vets. 

"That innovation award started the flywheel going and now we can leverage this contract to start to expand across the whole VA system," said Matthew Stoudt, AppliedVR co-founder and CEO, in an interview. 

AppliedVR has been working with the VA for the past two years as the agency is an early adopter of immersive therapeutics. "There are more than 120 VA sites actually already using immersive therapeutics of some kind. They have over 1,000 healthcare providers that are doing something with immersive therapeutics on a regular basis. Awareness and acceptance of immersive therapeutics is extremely high within the VA," Stoudt said.

The VHA provides care to more than nine million veterans, and more than half of them are affected by chronic pain. The VHA has stepped up efforts to explore innovative, drug-free approaches to tackle chronic pain among veterans. Addressing mental health issues among veterans also is a top priority for the agency. Research has shown that VR can help reduce anxiety. The VA has been using VR for a number of years to treat post-traumatic stress disorder among veterans.

"What we do is right at the nexus of the two [chronic pain and behavioral health]. We're super excited to get on the contracting vehicle, which now means that essentially any doctor in any VA facility can write a prescription and they'll get covered because they can pull from the contract," Stoudt said.

AppliedVR's virtual reality-based treatments are now used on more than 60,000 patients in 240 hospitals and 1,500 patient homes.

It's been a banner year so far for AppliedVR. Back in March, the Centers for Medicare and Medicaid Services (CMS) granted the company a unique Healthcare Common Procedure Coding System (HCPSC) Level II code for RelieVRx, and placed it in an existing benefit category: durable medical equipment.

AppliedVR now holds the distinction of being the first company to make an immersive therapeutic that is now covered by Medicare. The CMS ruling was significant as it paves a reimbursement pathway. Providers can now bill for AppliedVR’s device as durable medical equipment.

"We have just been on fire over the last year and a half," Stoudt said.

Early on, company leaders recognized the regulatory and reimbursement challenges for prescription digital therapeutics. AppliedVR gained FDA do novo clearance to market its RelieVRx virtual reality system as a hardware-software device combination, Stoudt noted.

In March, several senators reintroduced a bill that would require CMS to provide a coverage category for digital therapeutics software.

But AppliedVR doesn't have to wait for new legislation like many of its DTx peers. The company's hardware component proved to be an advantage in its path to FDA approval and to secure Medicare reimbursement, Stoudt said.

"The biggest challenge that a lot of the prescription digital therapeutics companies face is they have no pathway to get reimbursement through CMS. I think it was a big thing that impacted Pear [Therapeutics.] It's an ongoing challenge and it requires an act of Congress to create a new reimbursement category. We recognized these challenges very early on and as we saw the scars that some of the other players were incurring in the marketplace so we went through FDA as a hardware-software software."

He added, "That approach we took paid off in spades in March when we got from CMS our own unique HCPSC code as well as category determination saying that we are durable medical equipment. That category of termination means CMS recognizes that we fit within an existing pathway for reimbursement. That was a monumental milestone."

Pear Therapeutics, which planted some of the earliest seeds that prescription smartphone apps could stand alongside prescription drugs, has failed to bear fruit, recently filing for Chapter 11 bankruptcy. CEO Corey McCann told Fierce Medtech the company struggled to secure insurance reimbursements—and therefore, revenue—for its products.

The Medicare ruling also indicates that CMS is making strides to cover more innovative technologies, Stoudt said.

"They recognize they are hamstrung in the world of digital therapeutics and they've taken some arrows in the past for saying they don't embrace innovation. I think this was a big opportunity for them to demonstrate that they are embracing innovative technologies as long as you can fit within a pathway that exists because otherwise their hands are tied," he said.

AppliedVR now has a cleared path to scaled reimbursement, he noted. The government’s approval of the product will perhaps entice commercial health plans, self-insured employers and other payers to take a closer look.

"[Commercial payers] recognize the challenge that we have with the chronic pain crisis and just how much we are spending on that. They are proactively looking for alternatives. It certainly helps when they see the sign-off from CMS and that's going to be a big differentiator for us," Stoudt said. "As payers are looking for alternatives, especially for non-pharmacological alternatives, they are looking at one, what is your reimbursement pathway and then two, what is the body of data that you're building."

AppliedVR continues to invest in research and clinical trials and is partnering with insurers on pilot projects to test out VR-based therapeutics programs.

"Right now we are laser-focused on the broad category of chronic pain. Our growth strategy is to continue to expand out in terms of the types of chronic pain that we're able to provide treatment for. We'll be working through the FDA to expand that label rapidly. From there, you can expect us to continue to expand into adjacent areas of behavioral health. So you think about areas like depression and anxiety," Stoudt said.