XR in Rehab: What’s New in 2025 and Why It Matters for Reimbursement

XR is reshaping rehabilitation, no longer a novel tool, it’s evolving into a core component of modern physical and occupational therapy. As clinics grow more comfortable with immersive tech, 2025 marks a pivotal moment: the conversation is shifting from “does it work?” to “how do we pay for it?”

This year’s standout developments are not just about what XR can do, but how it's becoming smarter, more portable, and reimbursement-ready.

What’s New in XR Rehab This Year

Adaptive Intelligence

XR platforms are now integrating real-time feedback systems, adjusting challenge levels using biometrics like EMG, HRV, or motion data. This allows therapy to remain dynamic and personalized, a key value driver for clinicians and patients alike.

Device-Agnostic Access

One of the biggest leaps forward? Ease of access. Several leading XR rehab companies - including AVRwell - are pushing toward manage or bring-your-own-device (BYOD) models, which let patients and clinicians use XR therapy on commercial-grade VR headsets they already own. This not only increases affordability, but reduces friction for clinics adopting immersive care models.

Documentation Innovation

To prepare for reimbursement shifts, some XR vendors are also developing streamlined data export tools for clinicians. These systems simplify logging metrics like session duration, task success, and adherence, supporting billing documentation even before formal CPT codes exist.

XR and Reimbursement: Where Are We Now?

Despite the lack of a dedicated XR code in the permanent CPT code set, clinics and rehabilitation centers across the country are already using VR/XR tools during sessions that are billed under traditional codes. Commonly used CPT codes include:

• 97110 - Therapeutic exercise: Used when XR is integrated into range of motion or strengthening programs.

• 97530 - Therapeutic activity: For functional tasks in a 3D XR environment (e.g., squatting, reaching, dynamic balance, ADL’s).

• 97112 - Neuromuscular re-education: Ideal for XR balance, posture, and coordination training.

• 97799 (Unlisted procedure) - Used by some clinics to bill for XR-based interventions.

Clinicians document the therapeutic intent, patient response, and skilled guidance provided, whether delivered via traditional methods or immersive XR.

Remote Therapeutic Monitoring (RTM) Codes

XR platforms that collect and transmit usage or biometric data, particularly in home-based care, can be eligible for billing under these codes:

• 98975 - Initial setup & patient education

• 98977 - Device supply for musculoskeletal monitoring (most relevant for XR rehab)

• 98980–98981 - Monthly therapist time for data review and management

These codes are increasingly accepted by Medicare Advantage and private insurers, especially when supported by platform-generated adherence and engagement reports.

Category III CPT Codes (Experimental/Tracking Codes)

• 0770T - Virtual reality technology to assist therapy procedures
  A temporary code used to supplement traditional PT/OT codes when VR is used during therapy. Cannot be billed as a standalone procedure.

• 0791T - Use of VR technology in conjunction with CPT 97116 (Gait Training) Specifically designed to indicate when VR enhances gait training sessions. It’s a major step toward standardizing XR within musculoskeletal and neurological rehab pathways.

These codes are not universally reimbursed, but their existence signals the beginning of formal tracking and data collection by CMS and payers to assess XR outcomes and utilization.

Research & Policy Support for XR Coverage

Multiple studies and reviews are advocating for a clearer reimbursement framework. Here's what recent literature and government analysis reveal:

• Glegg & Levac (2023) in JMIR Rehabilitation highlight that XR interventions not only produce comparable or superior clinical outcomes in stroke and orthopedic care, but also reduce therapist time, suggesting value-based efficiency that could justify reimbursement.

• Furlan et al. (2023) in Journal of NeuroEngineering and Rehabilitation argue for a payment model that recognizes “digital modality-enhanced care” and recommends modifier-based CPT integration to distinguish XR-based sessions from conventional therapy.

• The CMS Digital Health Workgroup included immersive VR in its 2024 and 2025 exploratory reviews of digital therapeutics, noting its potential “if supported by quantifiable adherence and engagement data” (CMS, 2025).

What’s Ahead

The CMS 2026 Physician Fee Schedule is expected to feature formal proposals for XR-linked reimbursement policies, particularly for outpatient PT and OT services. Additionally:

• The American Occupational Therapy Association (AOTA) and American Physical Therapy Association (APTA) are advocating for XR-related codes, particularly under telehealth parity and value-based care initiatives.

• Industry groups like the Digital Therapeutics Alliance are advocating for XR modifier codes to clarify its use within existing CPT structures.

• Private payers are starting pilot reimbursement programs under innovation waivers for digital rehab, watch for case studies by Q4 2025.

Final Thought

The XR story in rehabilitation is evolving fast. We’ve passed the era of validation, XR is a proven tool. The challenge now is infrastructure: reimbursement, access, and integration. Fortunately, the field is ready. From device flexibility to smarter documentation tools, the ecosystem is moving in step with policy evolution. It’s not if XR will be reimbursed, it’s when. And 2025 is laying the groundwork.

References:

Centers for Medicare & Medicaid Services. (2025). CY 2025 Medicare Physician Fee Schedule Proposed Rule (CMS-1807-P). https://www.cms.gov/

Furlan, L., Picelli, A., & Gandolfi, M. (2023). Rethinking reimbursement in XR rehabilitation: A framework for digital-enhanced PT/OT services. Journal of NeuroEngineering and Rehabilitation, 20(1), 101–110. https://jneuroengrehab.biomedcentral.com/articles/10.1186/s12984-023-01137-7

Glegg, S. M. N., & Levac, D. E. (2023). Virtual reality as a tool in rehabilitation: The case for integration and reimbursement. JMIR Rehabilitation and Assistive Technologies, 10(1), e44213. https://rehab.jmir.org/2023/1/e44213/

Digital Therapeutics Alliance. (2025). Policy initiatives supporting XR reimbursement models in rehab.https://www.dtxalliance.org/