Medicare’s LCD for Skin Substitutes: Are We Saving the System or Sacrificing It?
As Medicare’s new Local Coverage Determination (LCD) for cellular, acellular, and matrix-like products (CAMPs) approaches implementation, the wound care industry finds itself at a pivotal—and divisive—moment. A recent article in the Journal of Wound Care titled “The Hidden Costs of Limiting Access” raises concerns about the clinical and economic fallout of this policy. Meanwhile, a growing chorus of stakeholders is asking a different question: Will there even be a viable outpatient wound care skin substitute industry in 2026 if we keep kicking the can down the road?
This debate is not just academic. It’s about real patients, real providers, and a market on the edge of collapse or reform—depending on how we act.
Shared Ground: A System in Distress
While the perspectives differ, there is unanimous agreement on the most fundamental points. The outpatient wound care sector is unstable, overwhelmed by market saturation, reimbursement ambiguity, and skyrocketing costs.
Medicare spending on skin substitutes has exploded, reportedly exceeding $1 billion per month—well beyond the $3.9 billion annual total documented in 2023. The Medicare Payment Advisory Commission (MedPAC) has flagged extreme cases, including patients costing $280,000 or more for skin substitutes, with million-dollar cases becoming alarmingly common. All too often, these products enter the market with minimal to no clinical evidence backing their efficacy.
At the same time, good providers are stepping away from advanced wound care—not due to loss of faith in the modality, but because the environment has grown too chaotic, too legally uncertain, and frankly, too risky to justify the effort.
The LCD Debate: Two Truths in Tension
The Journal of Wound Care article makes a compelling case for preserving access to CAMPs. Drawing on Medicare claims data from 2015 to 2019, the authors demonstrate that when CAMPs are combined with standard care, outcomes improve dramatically. They cite significantly lower amputation rates, reduced hospital readmissions, shorter healing times, and per-patient cost savings of nearly $4,000 in the first year of care.
However, critics of the article and defenders of the proposed LCD raise several legitimate concerns. They argue that much of the supporting data predates the explosion of new skin substitute products and fails to reflect the distorted pricing landscape we now face. In today’s market, the average sales price (ASP) for CAMPs exceeds $800 per cm². Some products range up to $13,000 per cm², and when cost models are re-run using these updated figures, the economic savings claimed in the article may evaporate.
Further, while the article warns of product shortages due to LCD restrictions, there’s little evidence to support that claim. Industry leaders like Kerecis and others reportedly have ample manufacturing capacity to meet demand—just as they did before the market became overcrowded with “me-too” products.
Importantly, the LCD doesn’t exclude real-world evidence (RWE). It simply expects RWE to meet minimum standards for bias control—requirements that many existing wound care studies fail to meet. The alternative, critics argue, is to allow CMS no other defense against abuse but post-payment audits, which only add administrative burden for legitimate providers.
The Real Risk: Inaction Is Its Own Catastrophe
There is one central question that neither side can ignore: What is the cost of doing nothing?
Proponents of the LCD view the past few years as a cautionary tale. Without stricter guidelines and limits, CMS has effectively been writing blank checks to any manufacturer able to launch a product and market it aggressively. The system is being gamed, and unless guardrails are implemented, the risk to the Medicare trust fund—and ultimately to all patients—will only grow.
On the other hand, arbitrarily capping treatment at eight applications over 16 weeks, as proposed in the LCD, has its own severe risks. Chronic wounds do not follow bureaucratic timelines. For many patients—particularly those with complications or delayed access to care—eight applications may not be enough. In those cases, the cost of failed treatment isn’t just measured in dollars, but in lives, limbs, and dignity.
Reconciling Reform with Reality: A Blueprint for Moving Forward
This is not a binary issue. We are not choosing between fraud prevention and patient care. We must achieve both. A viable path forward must include:
1. Rapid and Transparent LCD Updates
CMS must commit to quarterly updates that allow new evidence-backed products to be added promptly, keeping pace with innovation without compromising integrity.
2. A Tiered Fixed-Fee Reimbursement Model
The ASP system has created dangerous incentives and inflated pricing. Transitioning to a tiered fixed-fee schedule (e.g., $400–$800/cm² based on clinical effectiveness) can stabilize the market while supporting fair access.
3. Medical Necessity with Justification, Not Arbitrary Caps
The proposed eight-application limit should be replaced with a system that allows continued treatment when justified by clinical documentation. Use of a KX modifier to support extended care is already standard in other areas of Medicare policy.
4. Real-World Evidence with Real Standards
CMS should allow RWE, but require that it pass recognized bias control thresholds such as ROBINS-I. Quality matters, and evidence must meet that bar.
5. Smarter Audits That Target Outliers
CMS must design fraud detection systems that focus on statistical anomalies, not blanket audits. Legitimate providers should not bear the burden of cleaning up industry misuse.
Integrity and Innovation Can Coexist
The upcoming LCD for CAMPs is not just a policy change—it’s a litmus test for whether the wound care industry can evolve without imploding. Critics of the policy are right to fear that overly restrictive limits could delay healing and increase complications. But defenders of the policy are also right: without reform, the system is unsustainable, and every delay only empowers bad actors.
Instead of tearing down the LCD, the focus should be on building it right. Evidence-based coverage, timely updates, equitable reimbursement, and clearly defined pathways for medical necessity can transform this debate from one of division to one of progress.
Because if we don’t act now—with clarity and purpose—the question will no longer be how to save the skin substitute industry. It will be whether there is anything left to save at all.
