The U.S. Department of Health & Human Services’ Office of Inspector General (OIG) has reported “a number of concerning trends” tied to skin substitutes used by wound care patients.
In a Sept. 8 report, the OIG said Medicare Part B expenditures for skin substitutes “skyrocketed” in the past two years. By the end of 2024, the annual cost had passed the $10 billion mark.
And while the OIG report acknowledges that increased utilization did impact the rise in expenditures, it added, “Despite Medicare Advantage having more than half of all Medicare enrollees, utilization and expenditures for skin substitutes under Medicare Advantage were just a fraction of utilization and expenditures under original Medicare.”
The report added, “Among enrollees with a skin substitute claim, costs for those reportedly treated at home were four times as high as those treated in an office setting. Skin substitutes seem particularly vulnerable to questionable billing and fraud schemes.”
Wound care professionals respond
In a report published Sept. 3 in Journal of Wound Care, stakeholders expressed concern that a rush to judgment by the Centers for Medicare & Medicaid Services (CMS) could ultimately harm Medicare beneficiaries.
The report — Safeguarding Access, Fiscal Responsibility and Innovation: A Comprehensive Reimbursement Framework for CAMPs to Preserve the Medicare Trust Fund — was written by a group of 11 wound care professionals, including a number of physicians specializing in wound care. The “CAMPs” in the report’s title refers to cellular, acellular and matrix-like products.
“These [CAMPs] products are vital to treating hard-to-heal wounds, which disproportionately affect older patients, and those patients who are disabled and medically underserved,” the authors noted. “While CMS aims to curtail excessive spending and introduce payment consistency, the current proposal threatens access to life-saving therapies, endangers patient outcomes, and may destabilize clinical delivery infrastructures and manufacturing ecosystems critical to wound care.”
How CAMPs products should be funded
The OIG said in its investigation, “For payment purposes, CMS treats skin substitutes like approved prescription biologics, and skin substitutes are reimbursed in non-institutional Part B settings at 106% of the average sales price (ASP). In March 2023, OIG issued a report that identified significant gaps in manufacturer compliance with new ASP reporting requirements for skin substitutes.
“Despite efforts by CMS to address the accuracy and completeness of ASP reporting, significant increases in expenditures since the OIG report was released raise concerns about what could be driving these trends.”
But while the authors of the Safeguarding Access report acknowledge that waste, fraud and abuse “contribute to most of the rising spending on CAMPs,” they add, “Addressing this concentrated misuse through targeted policy reform, not artificial cost constraints, is a solution pathway that would provide the greatest benefit to Medicare enrollees and support the long-term solvency of the Medicare trust fund.”
The authors expressed concern about reduced access, saying, “A reimbursement amount set below the acquisition cost of CAMPs undermines the financial viability of care delivery in both facility settings (also referred to as hospital outpatient departments) and non-facility settings (which include private office-based practices, post-acute care and advanced mobile wound care practices).
“When reimbursement fails to cover the cost of therapy, providers may be forced to restrict access or shift care toward facilities that are exempt from reimbursement ceilings, creating fragmentation in care delivery.”
CMS’s Calendar Year 2026 Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems proposed rule would give CMS the ability “as a short-term measure” to “calculate weights using utilization data from only the hospital outpatient setting and establish for CY [calendar year] 2026 a single payment rate of approximately $125.38 per square centimeter that would apply to all three categories of skin substitute products.”
That proposed initial reimbursement rate “for CAMPs that do not have Biologics License Applications status risks restricting or eliminating access to high-performing but higher-cost CAMPS, especially for patients with complex, hard-to-heal or large-area wounds,” the authors said. “This disproportionately impacts rural hospitals, safety-net clinics and underserved populations that already face significant barriers to advanced wound care technologies.”
Flat-rate pricing “introduces a one-size-fits-all reimbursement methodology that disregards clinical nuance and disease severity,” the study added. “Lower-cost therapies are not supported by evidence demonstrating equivalence to more effective biologic or composite CAMPs, such as placenta-derived allografts, which have been shown to significantly reduce mortality, recurrence and adverse outcomes in patients with lower-extremity diabetic ulcers (LEDUs) or venous leg ulcers (VLUs). This approach will erode years of progress in evidence-based wound care protocols, especially for LEDUs, VLUs and pressure injury ulcers, for which tailored approaches are essential.”
Ultimately, reduced access to the best wound care technology could result in “costly adverse outcomes,” the study said, “including amputations, emergency department visits, intensive care unit admissions, and even mortality from sepsis and wound-related infections.”
Meanwhile, research into the timely use of advanced wound care technology, including CAMPs, shows those products reduce “30-day hospitalization rates and long-term costs,” the authors said. “Without safeguards, the CMS proposal risks raising net Medicare spending over time while compromising beneficiary quality of life.”
The public comment period for the hospital outpatient and ambulatory surgical center payment systems proposed rule closed Sept. 15.
