On November 14, 2024, the Centers for Medicare & Medicaid Services (CMS) finalized Local Coverage Determinations (LCDs) for skin substitute grafts and Cellular and Tissue-Based Products (CTPs). These policies, issued by all seven Part B Medicare Administrative Contractors (MACs), were initially set to take effect on February 12, 2025, but the implementation date has been postponed to April 13, 2025.
The LCDs outline coverage requirements and limitations, including lists of covered and non-covered products, specifically targeting the treatment of diabetic foot ulcers (DFUs) and venous leg ulcers (VLUs).
In 2025, the Centers for Medicare & Medicaid Services (CMS) will implement significant changes to billing regulations for skin substitutes, aiming to enhance transparency, standardize reimbursement, and ensure cost-effective treatments for patients with chronic wounds. These updates will profoundly affect hospitals, wound care specialists, and medical billing practices.
Key Changes in Skin Substitute Billing for 2025
- New Classification and Pricing System Historically, skin substitutes were categorized broadly, leading to inconsistent reimbursement practices. In 2025, CMS will introduce a refined classification system that groups these products based on their clinical effectiveness, composition, and application methods. This initiative aims to standardize pricing, prevent overutilization, and establish equitable payment structures. Wound care providers should assess how their preferred products align with this new classification and adjust treatment protocols accordingly.
- Revised HCPCS Codes To improve billing transparency, CMS will update the Healthcare Common Procedure Coding System (HCPCS) codes. These revisions will facilitate precise differentiation between various skin substitutes and their specific applications, thereby reducing reimbursement delays and claim denials. Healthcare providers must ensure their billing departments utilize the correct HCPCS codes to maintain compliance and financial stability.
- Stricter Reimbursement Policies The forthcoming regulations will impose limitations on the frequency of skin substitute applications and specify the types of wounds eligible for coverage. These measures aim to curtail unnecessary expenses while maintaining essential patient care standards. Wound care providers should familiarize themselves with these restrictions to avoid claim denials and ensure optimal patient outcomes.
- Enhanced Documentation Requirements CMS is placing increased emphasis on comprehensive documentation to justify the medical necessity of skin substitutes. Providers must now include detailed patient assessments, wound progression reports, and evaluations of treatment effectiveness. Failure to meet these stringent documentation standards could result in claim denials and revenue losses.
- Restrictions on Off-Label Use CMS has clarified that only FDA-approved indications for skin substitutes will be eligible for reimbursement. Providers utilizing these products for non-approved conditions may face audits, claim rejections, or financial penalties. Healthcare professionals must evaluate alternative treatments for cases previously managed through off-label use to remain compliant with the new regulations.
The Centers for Medicare & Medicaid Services (CMS) have established comprehensive guidelines for the use of skin substitute grafts and Cellular and Tissue-Based Products (CTPs) in treating diabetic foot ulcers (DFUs) and venous leg ulcers (VLUs). Below is a summarized overview of these guidelines, presented in table format for clarity.
Coverage Requirements
| Criterion | DFUs | VLUs |
|---|---|---|
| Ulcer Condition | Chronic, non-infected DFUs that fail to achieve at least 50% ulcer area reduction after four weeks of standard care. | VLUs that fail to respond after four weeks of standard care treatment. |
| Standard of Care (SOC) Components | – Comprehensive patient assessment (history, exam, vascular assessment) and diagnostic tests as indicated as part of the implemented treatment plan. – Assessment of Type 1 or Type 2 diabetes and management history with attention to comorbidities, review of current blood glucose levels/hemoglobin A1c (HbA1c), diet and nutritional status, activity level, physical exam that includes assessment of skin, ulcer, and vascular perfusion and assessment of off-loading devices or use of appropriate footwear. | – Comprehensive patient assessment (history, exam, vascular assessment) and diagnostic tests as indicated as part of the implemented treatment plan. – Assessment of clinical history, including prior ulcers, body mass index, history of pulmonary embolism or superficial/deep venous thrombosis, number of pregnancies and physical inactivity, physical exam (edema, skin changes and vascular competence), evaluation of venous reflux, perforator incompetence and venous thrombosis. The use of a firm strength compression garment (>20 mmHg) or multi-layered compressive dressing is an essential component of SOC for venous stasis ulcers. |
| Treatment Plan Implementation | – Debridement – Offloading for DFUs – Infection control – Exudate management – Documentation of smoking history, counseling on the effect of smoking on wound healing, and treatment for smoking cessation and outcome of counseling. | – Debridement – Compression therapy for VLUs – Infection control – Exudate management – Documentation of smoking history, counseling on the effect of smoking on wound healing, and treatment for smoking cessation and outcome of counseling. |
| Documentation of Response to Treatment | – Measurements of the initial ulcer – Pre-SOC ulcer measurements – Weekly SOC ulcer measurements – Post-completion SOC ulcer measurements following at least four weeks of SOC treatment – Ulcer measurements at initial placement of the skin substitute graft/CTP and before each subsequent placement – Failure to heal or stalled response despite SOC measures must precede the application for a minimum of four weeks – Continuous SOC treatment for the course of therapy. | – Measurements of the initial ulcer – Pre-SOC ulcer measurements – Weekly SOC ulcer measurements – Post-completion SOC ulcer measurements following at least four weeks of SOC treatment – Ulcer measurements at initial placement of the skin substitute graft/CTP and before each subsequent placement – Failure to heal or stalled response despite SOC measures must precede the application for a minimum of four weeks – Continuous SOC treatment for the course of therapy – Continuous compression therapy for VLUs for the episode of care. |
| Additional Documentation | – Documentation of failed interventions during prior ulcer evaluation and management. – Documentation of updated medication history, review of pertinent medical problems diagnosed since the previous ulcer evaluation and explanation of the planned skin replacement with the choice of skin substitute graft/CTP. – Documentation that patient is under the care of a qualified provider managing the underlying systemic disease (e.g., venous insufficiency, diabetes, neuropathy). | – Documentation of failed interventions during prior ulcer evaluation and management. – Documentation of updated medication history, review of pertinent medical problems diagnosed since the previous ulcer evaluation and explanation of the planned skin replacement with the choice of skin substitute graft/CTP. – Documentation that patient is under the care of a qualified provider managing the underlying systemic disease (e.g., venous insufficiency, diabetes, neuropathy). |
Key Limitations
| Limitation | Description |
|---|---|
| Maximum Applications | Up to eight applications within a 12–16-week episode of care, with strict documentation requirements justifying more than four applications. Use of a KX-modifier is required to attest to medical necessity for exceeding four applications. |
| Product Use | The skin graft must be used with the most appropriate size available. Excessive wastage is not permitted, and the graft should be applied in a single layer without overlay of product or adjacent skin in compliance with the correct label application techniques for the product. |
| Repeat Applications | Not considered reasonable and necessary when a previous application was unsuccessful, defined as an increase in size or depth of an ulcer, no measurable change from baseline, and no sign of improvement or indication that improvement is likely, such as granulation, epithelialization, or progress towards closure. |
| Contraindications | Application is not reasonable and necessary in patients with inadequate control of underlying conditions or exacerbating factors, or other contraindications (e.g., active infection, progressive necrosis, active Charcot arthropathy of the ulcer extremity, active vasculitis, or ischemia). |
Covered Products
For DFUs:
| Product Name |
|---|
| Affinity |
| AmnioBand, Guardian |
| Apligraf |
| DermACELL, AWM, Pourous |
| Derma-Gide |
| Dermagraft |
| Epicord |
| Epifix |
| FlexHD or AllopatchHD |
| Grafix Stravix Prime PL |
| GraftJacket |
| Integra or Omnigraft Dermal Regeneration Template |
| Kerecis Omega3/Kerecis Omega3, MariGen Shield |
| NuShield |
| Oasis Wound Matrix |
| PriMatrix |
| Theraskin |
For VLUs:
| Product Name |
|---|
| AmnioBand, Guardian |
| Apligraf |
| Dermagraft |
| Epifix |
| Oasis Wound Matrix |
Note: More than 100 brand-name products are listed as “Non-Covered Products,” underscoring the importance of verifying the inclusion of your product on the approved list.
Providers should consult their specific Medicare Administrative Contractor (MAC) for detailed information and any regional variations in coverage.
Impact on Wound Care Providers
- Financial Considerations With new pricing structures and reimbursement restrictions, wound care providers need to reassess their financial strategies. Adjustments may include reviewing cost structures for wound care treatments, negotiating better pricing with suppliers, and budgeting for reimbursement fluctuations to maintain financial viability.
- Operational Adjustments The regulatory changes necessitate operational modifications, including updating billing codes and processes, training staff on new compliance requirements, and modifying Electronic Health Records (EHR) to align with the enhanced documentation standards. These adjustments are crucial to ensure seamless compliance and efficient patient care delivery.
- Patient Access to Skin Substitutes Tighter regulations may impact patient access to skin substitute treatments. Providers must ensure proper documentation to meet CMS guidelines, communicate effectively with insurers about reimbursement policies, and consider alternative wound care treatments when necessary to continue delivering quality care.
- Billing and Compliance Challenges The complexity of these new regulations increases the risk of higher claim denials, more frequent audits, and additional administrative burdens. Wound care providers must prioritize accurate coding and compliance to avoid financial setbacks and maintain operational efficiency.
Common CPT Codes for Skin Substitute Billing
Precise medical coding is vital for ensuring accurate reimbursement and maintaining compliance within healthcare practices.
It directly influences financial health, supports proper patient record documentation, and minimizes the risk of compliance issues.
Moreover, accurate coding facilitates seamless insurance reimbursements, promoting financial stability within healthcare organizations. The following are common Current Procedural Terminology (CPT) codes used in skin substitute billing:
- CPT 15271: Application of skin substitute graft to the trunk, arms, or legs; first 25 sq cm or less.
- CPT 15272: Each additional 25 sq cm or part thereof (List separately in addition to code for primary procedure).
- CPT 15273: Application of skin substitute graft to the trunk, arms, or legs; first 100 sq cm or less, or 1% of body area of infants and children.
- CPT 15274: Each additional 100 sq cm or part thereof (List separately in addition to code for primary procedure).
- CPT 15275: Application of skin substitute graft to the face, scalp, eyelids, mouth, neck, ears, orbits, genitalia, hands, feet, and/or multiple digits; first 25 sq cm or less.
- CPT 15276: Each additional 25 sq cm or part thereof (List separately in addition to code for primary procedure).
- CPT 15277: Application of skin substitute graft to the face, scalp, eyelids, mouth, neck, ears, orbits, genitalia, hands, feet, and/or multiple digits; first 100 sq cm or less, or 1% of body area of infants and children.
- CPT 15278: Each additional 100 sq cm or part thereof (List separately in addition to code for primary procedure).
It’s imperative for billing departments to stay updated on these codes and ensure their correct application to prevent claim issues.
Also read: Common CPT Codes for Wound Care
Preparing for the New Billing Guidelines
- Strengthen Documentation Practices To prevent claim denials, providers must enhance documentation by standardizing patient assessment records, implementing detailed wound care treatment plans, and training staff on CMS documentation requirements. This proactive approach ensures compliance and supports the medical necessity of treatments.
- Optimize Financial Strategies Healthcare organizations should assess the financial impact of reimbursement changes, negotiate pricing with skin substitute suppliers, and plan for potential revenue adjustments. Proactive financial planning helps maintain profitability amidst regulatory shifts.
- Consider Outsourcing Medical Billing Given the forthcoming changes to CMS billing regulations for skin substitutes, healthcare providers face increased administrative tasks to ensure compliance. Outsourcing medical billing can alleviate this burden by reducing errors, accelerating insurance payments, and lowering operational costs. This approach allows providers to focus more on patient care, knowing that billing processes are managed efficiently by specialized professionals.
Outsourcing Medical Billing Services
Given the complexities introduced by the new CMS regulations, healthcare providers might consider outsourcing their medical billing processes. This approach offers several advantages:
- Cost Reduction Maintaining an in-house billing department involves expenses related to salaries, benefits, training, and technology infrastructure. Outsourcing can reduce these costs by up to 30%, allowing practices to allocate resources more efficiently.
- Access to Expertise Outsourcing provides access to professionals well-versed in the latest billing regulations and technologies, ensuring compliance and reducing errors.
- Improved Efficiency and Revenue Cycle Management Specialized billing companies can process claims faster and with fewer errors, leading to quicker reimbursements and improved cash flow.
- Enhanced Transparency Reputable billing companies offer comprehensive performance reports, granting healthcare providers clear visibility into their billing operations.
- Scalability Outsourcing allows practices to easily scale their billing operations in response to growth or changing needs without the challenges of hiring and training additional staff.
Conclusion
The CMS’s 2025 updates to skin substitute billing regulations underscore the need for healthcare providers to adapt their billing practices. Accurate coding, comprehensive documentation, and adherence to the new guidelines are crucial to ensure proper reimbursement and compliance. Outsourcing medical billing services emerges as a viable strategy to navigate these complexities, offering benefits such as cost reduction, access to specialized expertise, and improved revenue cycle management. By staying informed and considering strategic operational adjustments, wound care providers can continue to deliver quality care while maintaining financial stability.
