CMS has released the proposed CY 2026 Physician Fee Schedule. CMS is proposing to continue to pay for CTPs that have a biologic license agreement (BLA) using Average Sales Price (ASP) +6%. However, all other products would be paid at $125.38/cm2 (prior to the application of the geographic adjustments). See the CMS Fact Sheet here. CMS notes the 40-fold increase in spending from 2019 to 2024.
Here is an excerpt from the Fact Sheet provided by CMS:
Skin Substitutes
Currently, most skin substitutes are paid as if they are biologicals under the average sales price (ASP)-based payment methodology described in section 1847A of the Social Security Act. Using this methodology, each skin substitute product receives a unique billing code and payment limit. This has led to significant growth in spending under Medicare Part B for skin substitutes in the non-facility setting. According to Medicare claims data, Part B spending for these products rose from $252 million in 2019 to over $10 billion in 2024, a nearly 40-fold increase. Most of that increase is directly attributable to increases in stated prices for specific products.
For CY 2026, we are proposing to pay for skin substitute products as incident-to supplies when they are used as part of a covered application procedure paid under the PFS in the non-facility setting or under the OPPS in the hospital outpatient department setting. CMS is also proposing to align skin substitute categorization consistent with their FDA regulatory status, such as 361 Human Cells, Tissues, and Cellular and Tissue-Based Products (HCT/P) and the device types: Pre-Market Approvals (PMAs) and 510(k)s. CMS believes grouping and paying for skin substitute products based on relevant product characteristics, consistent with their FDA regulatory status, recognizes the clinical and resource differences in product types and would incentivize competition to create more innovative products, while also resulting in significant savings to the Medicare Trust Fund. We note that for CY 2026, CMS is proposing to use a single payment rate reflecting the highest average for these three categories of skin substitute products to ensure we are not underestimating the resources involved with furnishing these services. In future years, we intend to propose payment rates that differentiate between the three FDA regulatory categories. CMS is proposing to implement these policy changes in both the hospital outpatient department and physician office settings to remain consistent across different settings of care. The proposed payment policy for skin substitutes in the hospital outpatient setting is provided in the CY 2026 Outpatient Prospective Payment System (OPPS)/ Ambulatory Surgical Center (ASC) proposed rule.
On CarolineFifeMD.com, Joe Rolley wrote a guest blog titled “What Claims Can Cellular Tissue Product / Skin Substitute Sales Reps Make About Wound Healing? A Closer Look at the Proposed List of 15 in the LCDs” in which he explained the ways that CTPs/CAMPs (skin substitutes) are classified. The classifications include: Premarket Approval (PMA) products, 510(k) products and 361 HCT/Ps (including “amniotic” products). In 2026, CMS plans to reimburse all categories at the same rate, but in future years, it intends to propose different payment rates for the three categories.
There will be a significant response from manufacturers and clinicians in response to this proposal. Stay tuned for more information.
