04/15/2025

Effective Date of Skin Substitute Policies Delayed

Finalized skin substitute draft policies delayed until January 1, 2026

Effective Date of Skin Substitute Policies Delayed
On April 11, 2025, all 7 Part B MACs announced the effective date of their "Skin Substitute Grafts/Cellular and Tissue-Based Products for the Treatment of Diabetic Foot Ulcers and Venous Leg Ulcers" Local Coverage Determinations will be delayed until January 1, 2026.  At the same time, CMS announced that "any peer-reviewed publications and high-quality findings from other public sources of skin substitute study results be submitted to CMS at CAGInquiries@cms.hhs.gov by November 1, 2025” to determine if revisions to the LCD are appropriate before it takes effect.

Medicare Finalizes Skin Substitute Graft Policies
Article contributed by PICA – authored by Andrew Alder, Esq, Parsons Behle & Latimer

The Centers for Medicare & Medicaid Services (CMS) recently finalized Local Coverage Determinations (LCDs) for skin substitute grafts and Cellular and Tissue-Based Products (CTPs). Released by all seven Part B Medicare Administrative Contractors (MACs) on November 14, 2024, these policies will govern the use of skin substitute grafts for Medicare Part B beneficiaries for services rendered on or after February 12, January 1, 2024. The new policies set forth coverage requirements and limitations, including a list of covered and non-covered skin graft products, for the treatment of diabetic foot ulcers (DFUs) and venous leg ulcers (VLUs).

Providers should review their MAC’s finalized LCD and take measures now to ensure compliance with the updated policies. The following is an overview.

Coverage Requirements

• Coverage will be available for chronic, non-infected DFUs that fail to achieve at least 50% ulcer area reduction after four weeks of standard care. Coverage will be available for VLUs that fail to respond after four weeks of standard care treatment.
• Standard of Care (SOC) includes:
• Comprehensive patient assessment (history, exam, vascular assessment) and diagnostic tests as indicated as part of the implemented treatment plan.
• For DFUs: assessment of Type 1 or Type 2 diabetes and management history with attention to comorbidities, review of current blood glucose levels/hemoglobin A1c (HbA1c), diet and nutritional status, activity level, physical exam that includes assessment of skin, ulcer, and vascular perfusion, and assessment of off-loading devices or use of appropriate footwear.
• For VLUs: assessment of clinical history (including prior ulcers, body mass index, history of pulmonary embolism or superficial/deep venous thrombosis, number of pregnancies, and physical inactivity), physical exam (edema, skin changes and vascular competence), evaluation of venous reflux, perforator incompetence, and venous thrombosis. The use of a firm strength compression garment (>20 mmHg) or multi-layered compressive dressing is an essential component of SOC for venous stasis ulcers.

• Implementation of a treatment plan to be continued throughout the course of treatment, demonstrating all of the following:
• Debridement.
• Offloading for DFUs.
• Compression therapy for VLUs.
• Infection control.
• Exudate management.
• Documentation of smoking history, counseling on the effect of smoking on wound healing, and treatment for smoking cessation and outcome of counseling.

• Documentation of response to treatment, which must include the following:
• Measurements of the initial ulcer.
• Pre-SOC ulcer measurements.
• Weekly SOC ulcer measurements.
• Post-completion SOC ulcer measurements following at least four weeks of SOC treatment.
• Ulcer measurements at initial placement of the skin substitute graft/CTP, and before each subsequent placement.
• Failure to heal or stalled response despite SOC measures must precede the application for a minimum of 4 weeks.
• Continuous SOC treatment for the course of therapy.
• Continuous compression therapy for VLUs for the episode of care.
  
  
• Documentation of failed interventions during prior ulcer evaluation and management. 
• Documentation of updated medication history, review of pertinent medical problems diagnosed since the previous ulcer evaluation, and explanation of the planned skin replacement with the choice of skin substitute graft/CTP.
• Documentation that patient is under the care of a qualified provider managing the underlying systemic disease (e.g., venous insufficiency, diabetes, neuropathy).

Key Limitations

• Maximum Applications: Up to 8 applications within a 12-16 week episode of care, with strict documentation requirements justifying more than 4 applications.
• Use of a KX-modifier is required to attest to medical necessity for exceeding 4 applications.
• Product Use: The skin graft must be used with the most appropriate size available. Excessive wastage not permitted, and the graft should be applied in a single layer without overlay of product or adjacent skin in compliance with the correct label application techniques for the product.
• Repeat applications are not reasonable and necessary when a previous application was unsuccessful, which is defined as increase in size or depth of an ulcer, no measurable change from baseline, and no sign of improvement or indication that improvement is likely (such as granulation, epithelialization, or progress towards closures).
• Application is not reasonable and necessary in patients with inadequate control of underlying conditions or exacerbating factors, or other contraindications (e.g., active infection, progressive necrosis, active Charcot arthropathy of the ulcer extremity, active vasculitis, or ischemia.) 

Covered Products
The following 17 brand-name products are listed as “Covered Products” for DFUs:

• Affinity
• AmnioBand, guardian
• Apligraf
• DermACELL, awm, pourous
• Derma-Gide
• Dermagraft
• Epicord
• Epifix
• FlexHD or AllopatchHD
• Grafix stravix prime pl
• GraftJacket
• Integra or Omnigraft dermal regeneration template
• Kerecis Omega3/Kerecis omega3, MariGen shield
• NuShield
• Oasis wound matrix
• PriMatrix
• Theraskin
  
  The following 5 brand-name products are listed as “Covered Products” for VLUs:
• AmnioBand, guardian
• Apligraf
• Dermagraft
• Epifix
• Oasis wound matrix

More than 100 brand-name products are listed as “Non-Covered Products,” underscoring the importance of verifying the inclusion of your product on the approved list.

Preparing for Compliance
These new policies significantly restrict the use of skin substitutes by: 1) limiting the products that are covered, and 2) imposing stringent documentation requirements. Providers must be well-versed in these policies to mitigate the risk of audits and ensure continued reimbursement. Additionally, providers are advised to avoid discount or rebate programs related to skin substitutes, which are under increasing scrutiny. 

Providers who use skin grafts should review the new policies and make any necessary adjustments to their wound care treatment protocols, inventory, and documentation/billing practices to ensure compliance with the new requirements. Electronic versions of the finalized LCDs, which are nearly identical across all Medicare Administrative Contractors (MACs), can be accessed here: 

• National Government Services (NGS) –L39828
• Novitas – L35041
• Noridian – L39764
• First Coast – L36377
• Palmetto GBA – L39806
• WPS – L39865
• CGS – L39756

By proactively updating practices and ensuring compliance, providers can continue delivering effective wound care to their patients while safeguarding their reimbursement under these new policies.