Skyrocketing spending on skin substitutes: What caused the increase for Medicare?

When the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) began examining spending trends for skin substitutes, there was much to discover in Medicare. David Tawes, MA, regional inspector general in the Baltimore, Maryland, HHS-OIG Office of Evaluation and Inspections, discusses reasons why payment grew quickly in the last few years.

Medical Economics: What was the cause of a massive increase in Medicare spending for skin substitutes used in wound treatment?

David Tawes, MA: It's a lot. There were a lot of different things. One is that, at least in Part B noninstitutional settings, like physicians’ offices, nursing facilities, home care, that the number of in of enrollees that were associated with skin substitute claims — we hesitate to say received skin substitutes because we're not sure how many of them actually received them. But as far as being billed, a lot more enrollees started getting skin substitutes. And then, for the ones that we're getting it, on average, the number of units — it’s billed by per square centimeters, a tiny amount. The number of units each enrollee that was getting the skin substitute, was increasing. And then the cost of the products being billed kept going up and up and up. So by the third quarter of 2024, the average cost of the skin substitutes being billed to Medicare was $1,500 per square centimeter and your average enrollee was getting 80 some square centimeters to treat, or reportedly receiving 80 or so square centimeters to treat a wound each quarter. So that's about $120,000 per patient each quarter, and that's that was triple the amount just two years earlier.