CMS Announces New Skin Substitute Payment Methodology: Possible Next Steps
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On October 31, 2025, CMS released its “CY 2026 Medicare Physician Fee Schedule Final Rule.”1 This Rule finalized a new payment model for skin substitute products applied to Medicare Part B beneficiaries during a covered application procedure in a non-facility setting and in the hospital outpatient department setting. Non-facility settings include private offices and patient’s homes. In 2026, CMS will continue to reimburse covered skin substitute application procedures and skin substitutes products separately for Medicare Part B beneficiaries. The payment for all skin substitute products will be the volume-weighted average payment amount for all 361 HCT/Ps, estimated to be $127.28 per square centimeter. The only exception to this is products considered to be “biologicals,” licensed under section 351 of the Public Health Service Act. For those, the average sales price (ASP) payment methodology will continue to apply.1 Everything detailed in this article applies to Medicare Part B beneficiaries. Non-Medicare payers may or may not adopt this same payment methodology.
The 2026 payment rate, as estimated above, will be based on the “volume-weighted ASP from the fourth quarter of 2024, with no additional markup, as submitted by manufacturers, when available.”1 In calculating this average, CMS will include all products used in either the CMS Physician Fee Schedule or hospital outpatient setting in its volume-weighting methodology while weighting product-specific utilization using proportions from only the OPPS data.
This change in payment methodology has no impact on the WISeR model, still scheduled to take effect January 1, 2026. This also has no impact on the finalized Part B Medicare Administrative Contractor (MAC) coverage policies, scheduled to take effect January 1, 2026, which establish coverage criteria and limit which products are allowed for diabetic foot ulcer (DFU) and venous leg ulcer (VLU) skin substitute application. These Part B MAC policies scheduled to take effect January 1, 2026 establish when skin substitute application is allowed for DFUs and VLUs while this new payment policy establishes payment amounts.
Next Steps for Impacted Professionals
There are many skin substitute products with good quality peer-reviewed literature to support their safety and efficacy that remain available and profitable to providers under this new payment model.
- Providers can find a listing of skin substitute average sales prices on the CMS ASP Pricing Files website.2
- On this website, clicking on the most recent date’s “ASP Pricing File” link opens a .zip folder that has two documents in it.
- Clicking on the “xlsx” file in this zip folder opens the corresponding date’s “Payment Allowance Limits for Medicare Part B Drugs” document.
- Level II HCPCS codes are listed in Column A of this document.
Column D of this document lists “payment limits” for many skin substitute products.
Providers can find the Column A HCPCS code that correlates with a skin substitute product and view its payment limit in Column D of the same row. Many of these payment limits are less than $127.28 per sq cm. Providers may consider viewing these values in making decisions about which products to use for their patients.
Dr. Lehrman is a Board Certified Podiatrist, Certified Professional Coder, and Certified Professional Medical Auditor. He operates Lehrman Consulting, LLC which provides guidance regarding coding, compliance and documentation.
Information regarding coding, coverage, and payment is provided as a service to our readers. Every effort has been made to ensure accuracy. However, HMP and the author do not represent, guarantee, or warranty that coding, coverage, and payment information is error-free and/or that payment will be received.
References
1. Centers for Medicare & Medicaid Services (CMS), US Dept of Health and Human Services. 42 CFR parts 405, 410, 414, 424, 425, 427, 428, 495, and 512; Medicare and Medicaid Programs—CY 2026 payment policies under the Physician Fee Schedule and other changes to Part B payment and coverage policies; Medicare Shared Savings Program requirements; and Medicare Prescription Drug Inflation Rebate Program. Final rule [CMS-1832-F; RIN 0938-AV50]. 2025.
2. Centers for Medicare & Medicaid Services. ASP pricing files. Accessed November 5, 2025. https://www.cms.gov/medicare/payment/part-b-drugs/asp-pricing-files
