Follow the money: CMS changes its skin substitute payment policy

Advocacy organization Accountable for Health has supported a major shift in Medicare payment policy for skin substitutes used to treat patient wounds. CEO Mara McDermott, J.D., discusses why this change will have effects across traditional Medicare and accountable care.

Medical Economics: CMS has changed its payment policy about skin substitutes. It sounds like Accountable for Health supported that policy change. Can you explain more about that?

Mara McDermott, J.D.: Yes, absolutely. So one factor that was leading to these horrific abuses that we've talked about is that there is, I don't know that loophole is the right way, right word, but there's sort of an interesting feature of reimbursement for skin-sensitive products through the average sales price plus 6% methodology. Under that methodology, for many reasons, probably would take us too long to get into skin substitute manufacturers have been able to refile their products at an escalating factor for price quarter after quarter. So you can look in the data. This is all publicly available data on the Medicare website, but you can look in the average sales price plus six ASP plus six files, and you can see that there are skin substitute products that are paid at $11 per square centimeter today, or in 2025 now, everything has been adjusted, but in 2025 all the way up to products that were being reimbursed $5,700 per square centimeter of product, and everything in between. And you could sort of track the companies that were refiling every quarter, and you could watch this growth from $1,000 per square centimeter to $2,000 to $3,000 to $4,000 to $5,000 $6,000 what the administration did in the Medicare Physician Fee Schedule for 2026 so this policy is effective now, was basically say we're not going to reimburse these products that way anymore. Everyone is getting a flat rate of $127 per square centimeter. So we are taking that sort of boundless upper limit and placing a cap on it. We're going to continue CMS will continue to review the data. But for now, the agency implementing this really sort of hard stop on the growth in the payment and reimbursement that we were seeing. Accountable for Health, as you said, super enthusiastic about this change. We were thrilled to see the change go through. We know that there were a lot of counter pressures on the agency, the manufacturers obviously did not want that payment change. So we were very excited to see that change go through, and we think that it will have a dramatic effect in terms of the abuses that we've seen, bringing things back into line, setting a more appropriate payment rate, and creating, you know, sort of a go-forward strategy that doesn't allow this quarter-over-quarter unregulated growth.