On the surface, the recent delay of the new Medicare LCD for skin substitutes to January 2026 may appear to be a win for providers and patients alike. After all, the proposed LCDs raised numerous concerns around access, frequency limits, and clinical documentation requirements.
The delay doesn’t address the underlying issue that brought us here in the first place.
While much of the conversation around the LCD has focused on what it does or doesn’t include, few are addressing the deeper issue that made an LCD necessary in the first place: the fundamentally flawed structure of Medicare’s Average Sales Price (ASP) reimbursement model for skin substitutes. Under current policy, a dehydrated amniotic skin substitute may be reimbursed at $150–$200 per unit. At the same time, another with nearly identical structure, source material, and clinical utility will reimburse for $2k+ per unit. These are not dramatically different innovations — they are often compositionally equivalent, processed in similar ways, and intended for the same clinical use. Yet, the reimbursement gap is staggering.
This isn’t just a pricing quirk — it’s the result of a policy model that was never designed for biologic grafts or wound care products. ASP was created for pharmaceuticals with standardized dosing and transparent pricing — not for tissue-based products with wide variability in reporting and distribution. It’s a broken fit. This mismatch has created a reimbursement landscape ripe for overpayment, misalignment, and compliance risk.
The ugly truth is that while many providers strive to put the right foot forward and select products they believe offer better outcomes or clinical efficacy, there are others who approach this through the lens of what’s most efficacious for their bottom line. Most clinicians want to provide the best care possible—but they’re also operating within a system that clearly incentivizes certain choices. Over time, this structure doesn’t just influence individual behavior—it shapes entire utilization trends across the country. With audits and qui tam cases on the rise, this is becoming more than just a reimbursement issue—it’s a compliance risk. Patterns of high-cost product usage without robust documentation of medical necessity are drawing the attention of Medicare contractors. The financial design of ASP isn’t just affecting budgets—it’s creating a minefield for providers, many of whom don’t realize they’re stepping into it.
Delaying the LCD to January 2026 does not mean a free pass for the rest of the year. Audits related to CTP utilization are already rising—and they will continue to rise, regardless of the LCD timeline. We can attest to this firsthand as a Wound Care RCM company. Providers using the highest reimbursing products must be prepared to show clinical justification that goes beyond general wound care notes.
