CMS Finalizes Sweeping Reforms to Skin Substitute Payments Amid Rising Costs and Enforcement Concerns
Summary: CMS has finalized significant reforms to skin substitute payments under the 2026 Medicare Physician Fee Schedule, establishing a flat rate of $127.28 per square centimeter for most products used in non-facility and hospital outpatient settings. Based on Q4 2024 data, the methodology addresses a 40-fold payment increase over five years, driven by fraud and overutilization in wound care. Biologicals under section 351 retain ASP reimbursement, and the changes do not affect the WISeR model or upcoming LCDs for diabetic foot ulcers (DFUs) and venous leg ulcers (VLUs). Providers must review product-specific limits to ensure compliance, with potential ripple effects on access for chronic wound treatments.
Key Highlights:
- Payment Model: Flat $127.28/cm² for skin substitutes in Part B non-facility/HOPD professional fees, effective Jan 1, 2026.
- Rationale: Curb $15B projected 2025 spend (up 50% from 2024) due to fraud/overuse in wound care.
- Exceptions: Section 351 biologicals use ASP; application services reimbursed separately.
- No Impact: WISeR model and DFU/VLU LCDs unchanged; encourages product review via ASP files.
- Enforcement: Ties to DOJ actions on $2B+ graft fraud; providers urged to audit for necessity.
Keywords: skin substitute reforms, CMS payment, diabetic foot ulcers, venous leg ulcers, fraud crackdown