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A regional inspector general for the U.S. Department of Health and Human Services explains oversight of a multi-billion-dollar trend in Medicare spending.
Starting in 2021, the law governing Medicare changed relating to skin substitutes used in wound care — and spending for those treatments started going up, up, and up. David Tawes, MA, regional inspector general in the Baltimore, Maryland, HHS-OIG Office of Evaluation and Inspections, explains the basis of examining this situation, which has cost billions of dollars in the Medicare system.
Medical Economics: Recently, there was a report that was published by the office regarding payments on skin substitutes for wound care. Can you explain briefly about how that report came about?
David Tawes, MA: So, we've actually been working in the skin substitute area for few years. They're paid as prescription drugs under Medicare Part B, which was an area that we'd done a lot of work in. But they weren't held to the same requirements, the price reporting and payment requirements as other Part B drugs because they're not really a drug. So, there were some changes to the law in 2021. Manufacturers of skin substitutes began having to report their prices to Medicare the same way that other drugs did. So, we looked to see whether they were following or complying with the new requirements. And we found that, at least at the start it was only about 50% that were complying. So we made recommendations to CMS, and it looked like reporting was improving. But strangely, we noticed that payments for skin substitutes, Medicare payments kept going up and up and up. So, we wanted to dive into it to see what could be causing what was behind these increases.
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